The CLARITY Act and US crypto market structure: what would change

A US-facing exchange, custodian or issuer still has no statutory answer to a basic question: which federal agency has jurisdiction over the token it lists, and under what registration. The Digital Asset Market Clarity Act, known as the CLARITY Act, was written to give that answer in law. As of September 2026 it has not passed, and the agencies it would bind have spent the interim building a version of the same answer out of interpretive releases, proposed rules and joint statements. For anyone deciding whether to build, list or custody in the United States, the difference between what a bill would require and what a regulator currently permits is the whole question. None of what follows is legal advice.

What the bill would change

The provisions below are described as they appear in the text the House passed in July 2025. The Senate Banking Committee reported the bill with an amendment in the nature of a substitute in 2026, and that substitute is now the pending text, so the details may differ.

Splitting SEC and CFTC jurisdiction

The bill's central move is to give the Commodity Futures Trading Commission authority over cash and spot markets in "digital commodities", assets whose value is tied to the functioning of a blockchain system, including exclusive anti-fraud and anti-manipulation authority, and to leave the Securities and Exchange Commission with jurisdiction over the issuance of "investment contract assets", tokens sold to raise capital. A third category, the "permitted payment stablecoin", is left to its issuer's banking regulator. Payment stablecoins are the subject of the separate GENIUS Act, signed into law on 18 July 2025, whose effect is deferred until its implementing regulations are finalised or 18 January 2027 at the latest; we set out that timing in our review of what regulators actually permitted this year.

The test for a digital commodity

The House text ties the status of a token to the maturity of the blockchain system it runs on, not to the token in isolation. A "mature blockchain system" is functional, runs on open-source code, operates on pre-established and transparent rules, and is not controlled by any person or group under common control, with 20 per cent or more of the tokens or of voting power as the control line. Certification that a system is mature is the bill's route for an asset to leave securities-law treatment. The same 20 per cent voting-power threshold is the starting point of our piece on who actually controls a protocol, which explains why a snapshot of holdings is only part of that test.

Registration for exchanges, brokers and dealers

The bill creates three CFTC registration categories: digital commodity exchange, digital commodity broker and digital commodity dealer. All three would join a registered futures association, keep records and meet business conduct standards, hold capital and manage risk, and segregate customer assets from their own. Exchanges would also carry duties of trade monitoring and reporting. A provisional registration framework would let firms keep operating while the CFTC writes the implementing rules. The bill also requires the SEC to let broker-dealers, alternative trading systems and national securities exchanges broker, trade and custody digital commodities and permitted payment stablecoins.

Customer asset protection

Customer digital commodities would be held with a "qualified digital asset custodian", one subject to supervision and examination for custody by a state or federal banking regulator, the CFTC or the SEC. Regulators could not require a firm to carry customer assets as liabilities on its own balance sheet, or to hold extra capital against them except as needed to cover operational risk.

How DeFi would be treated

The House text excludes from registration people who validate transactions, provide computational work, provide user interfaces to a blockchain system, or develop protocols and software, including wallets. The anti-fraud, anti-manipulation and false-reporting authorities still apply to them. How far those exclusions survive in the Senate substitute is one of the points still being negotiated.

Where the bill actually stands

None of the above is law. The sequence, dated:

• 17 July 2025: the House passed H.R. 3633 by 294 votes to 134.
• 18 September 2025: the Senate received the bill and referred it to the Committee on Banking, Housing, and Urban Affairs.
• 14 May 2026: the committee voted 15 to 9 to order it reported with an amendment in the nature of a substitute.
• 1 June 2026: the committee formally reported it, and it was placed on the Senate Legislative Calendar as Calendar No. 423.
• 8 August 2026: Majority Leader John Thune filed cloture on the motion to proceed, setting a vote for September.
• 15 September 2026: cloture failed, 49 in favour to 50 against, short of the 60 votes needed.

The failed vote was on whether to begin debate, not on passage. Seven Democrats voted no: Kirsten Gillibrand, Mark Warner, Cory Booker, Raphael Warnock, Ruben Gallego, Angela Alsobrooks and Catherine Cortez Masto. Among Republicans, Susan Collins, Josh Hawley and Jerry Moran voted no, and Thom Tillis switched from yes to no so that, under Senate rules, a motion to reconsider could be filed from the prevailing side. That motion was entered immediately, which keeps a procedural path open. Senator Cynthia Lummis told reporters afterwards, "I think we're done. It's over." Lummis also said the bill would not return to the floor, and with the midterm elections on 3 November 2026, floor time for comprehensive crypto legislation is expected to be scarce.

What the agencies have done without a statute

In the absence of the bill, the SEC and the CFTC have built a working, but revocable, version of the same split on their own authority.

• 4 August 2025: the CFTC, under then Acting Chairman Caroline D. Pham, launched an initiative to allow spot crypto contracts to be listed on CFTC-registered futures exchanges, with comments due by 18 August 2025. Listed spot crypto began trading on those exchanges on 4 December 2025.
• 5 September 2025: the two agencies issued a joint statement on harmonising product and venue definitions, reporting standards, capital and margin frameworks and innovation exemptions, and co-hosted a public roundtable on 29 September 2025.
• 12 November 2025: SEC Chairman Paul Atkins set out a token taxonomy in a speech, including "network tokens" whose value comes from a system that is "functional" and "decentralized" and which, in that view, are not securities. It tracks the bill's maturity test without the force of statute.
• 29 January 2026: Atkins and CFTC Chairman Michael Selig launched a joint harmonisation effort at an event at CFTC headquarters.

On 17 March 2026 the SEC issued an interpretive release (Release Nos. 33-11412 and 34-105020), effective 23 March 2026, setting out the Commission's view of how existing securities law applies to five categories of crypto asset: digital commodities, digital collectibles, digital tools, stablecoins and digital securities. The CFTC joined it, stating that it will administer the Commodity Exchange Act consistently with the SEC's interpretation, and it expressly supersedes the SEC staff's 2019 "Framework for 'Investment Contract' Analysis of Digital Assets". It interprets current law; it is not a new rule.

On 18 August 2026 the SEC went further and proposed Regulation Crypto Assets. The proposal would create two registration exemptions, one for offerings of up to 5 million dollars over four years and one for up to 75 million dollars in each 12-month period, and a conditional safe harbour from the "investment contract" analysis once an issuer has completed, or permanently stopped, the managerial efforts it promised. Comments are open for 60 days from Federal Register publication. It has not been adopted. Separately, Selig said in August 2026 that the CFTC has digital asset rule proposals prepared and will proceed with rulemaking whether or not the bill is enacted.

Reading the difference correctly

These actions carry different legal weight. Speeches and joint statements are signals of policy. The March 2026 release is the Commission's considered reading of statutes passed in 1933 and 1934, adopted by the Commission and joined by the CFTC, but a later Commission can revisit an interpretation in a way it cannot revisit a statute. Regulation Crypto Assets is a proposal out for comment and could change materially before adoption, or never be adopted. Only legislation would fix the jurisdictional line, the digital-commodity test and the registration categories in a form neither agency can revise on its own. A firm setting its US registration posture has to track the Senate calendar and the Federal Register at the same time, because neither one alone currently answers the question.