What is the CLARITY Act?

The CLARITY Act is a bill in the US Congress that would decide, by statute, which regulator oversees which part of the crypto market. Its full name is the Digital Asset Market Clarity Act, often shortened to the market-structure bill. As of October 2026 it has not become law.

What would the CLARITY Act do?

The bill, H.R. 3633, would:

• define a "digital commodity" and place those tokens under the CFTC, while the SEC keeps tokens that are securities,
• create federal registration for exchanges, brokers and dealers in digital commodities, closing the gap in oversight of ordinary spot trading,
• give token issuers a tailored way to raise money, with set disclosures,
• treat customers' digital commodities as customer property if a platform goes bankrupt,
• bring crypto platforms fully under the Bank Secrecy Act, the main anti-money-laundering law.

The Senate version added protections for software developers who do not control customer funds. It also included a compromise on whether platforms may pay rewards on stablecoin balances.

What happened in Congress?

1. July 17, 2025. The House passed the bill 294 to 134.
2. January 29, 2026. The Senate Agriculture Committee approved its portion, covering the CFTC, on a 12 to 11 party-line vote.
3. May 14, 2026. The Senate Banking Committee approved its portion 15 to 9, with two Democrats in favor.
4. September 15, 2026. The full Senate voted 49 to 50 on a motion to begin debate. It needed 60 votes. Every vote in favor came from Republicans, and four Republicans voted no.

Why did it fail?

The main dispute was ethics. Democrats wanted firm limits on senior officials, including the president and his family, profiting from crypto businesses, and said the draft fell short. Republicans said they had already made more than 100 changes at Democrats' request. A second dispute, over stablecoin rewards and their effect on bank deposits, stayed in the background.

What is its status now?

The bill is stalled but not formally dead. One Republican who voted no, Senator Thom Tillis, did so to keep the right to call for a new vote, and filed a motion to reconsider. Law firms following the bill describe passage before this Congress ends in January 2027 as unlikely. After that, a new bill would have to start again.

Meanwhile the agencies are acting under existing law. The SEC proposed Regulation Crypto Assets in August 2026, and the CFTC opened a rulemaking on leveraged retail trading on October 5. Lawyers at Troutman Pepper Locke note that agencies cannot create a federal license for a spot crypto exchange or change bankruptcy law. Only Congress can.

The stablecoin law, the GENIUS Act, is separate and was enacted in July 2025.

Rules differ by country and state and change often. Check official sources or a qualified professional for a specific case.