U.S. Sheriffs’ Group Shifts to Neutral on CLARITY Act

The Digital Asset Market Clarity Act is intended to establish a federal market structure for a US cryptocurrency industry valued at more than $2 trillion, bringing digital assets firmly within the regulated financial system. The bill remains stalled in the Senate, where lawmakers are divided over ethics restrictions on senior government officials’ crypto activity. Banks also oppose stablecoin rewards that resemble interest on deposits, warning they could pull money from the banking system.

CoinDesk reported on Aug. 4 that Crypto Watchdog, formed only weeks earlier, was saturating Washington television and social media with ads linking digital assets to terrorists, drug cartels and scams targeting seniors. Executive Director Chapin Fay declined to identify the group’s funders, despite portraying its mission as promoting transparency. A June survey of 1,000 voters commissioned by the group found 65% had a high level of distrust toward crypto. Senators face an Aug. 7 recess deadline and need at least 60 votes to advance the bill.

The Digital Asset Market Clarity Act, or CLARITY Act, is intended to replace the fragmented U.S. crypto rulebook with a federal market-structure regime. It would give the Commodity Futures Trading Commission a central role over digital commodities and trading intermediaries while defining the Securities and Exchange Commission’s authority. The House passed H.R. 3633 by 294-134 on July 17, 2025, and the Senate Banking Committee advanced it 15-9 on May 14, 2026, putting state-versus-federal enforcement at the center of the debate.

New York Attorney General Letitia James submitted written testimony on July 27, 2026, to the Senate Homeland Security and Governmental Affairs Committee’s Permanent Subcommittee on Investigations, warning that the measure would pre-empt state regulation and dilute local fraud enforcement. She said crypto-scam complaints to her office had tripled over three years and reported losses approached $500 million over five years. James urged Congress to preserve state money-transmission, commodities and securities laws and require platforms to meet anti-money-laundering, know-your-customer and cybersecurity standards, monitor suspicious activity and bear financial liability when safeguards fail.

The CLARITY Act seeks to establish a US crypto-asset market structure framework and clarify the division of regulatory authority between the Securities and Exchange Commission and the Commodity Futures Trading Commission. If the bill reaches the full Senate, it would typically need at least 60 votes to advance, making bipartisan cooperation critical to its prospects of becoming federal law. Current polling shows that most voters support clear cryptocurrency rules.

Coinbase Vice President of Policy Kara Calvert said at Consensus 2026 that the Senate Banking Committee could take up the bill as early as the following week. The committee subsequently scheduled a markup for May 14 and voted to advance the CLARITY Act. The bill must still clear a full Senate vote, while lawmakers' dispute over crypto-asset ethics rules for government officials could affect the final timetable and bipartisan support.

US cryptocurrency regulation has long relied on securities and commodities laws as well as regulators’ discretion, leaving the boundaries around token classification and developer liability unclear. Nonprofit advocacy group Coin Center says the CLARITY Act is intended to establish a framework for classifying digital assets and provide statutory protections for noncustodial blockchain developers, determining whether the industry can operate under predictable rules.

As of July 20, 2026, the CLARITY Act and related blockchain legislation remained stalled in the US Senate, with provisions including stablecoin yield among the disputed issues. No specific amount is involved. Coin Center warned that unless Congress explicitly limits regulatory discretion, future administrations could change their enforcement stance and take tougher measures against cryptocurrency companies and developers.