What the Clarity Act is and where the bill stands

The Clarity Act, formally the Digital Asset Market Clarity Act of 2025 (H.R. 3633), is a federal bill that would set the rules for how cryptocurrencies are traded and regulated in the United States. Its main job is to divide oversight between the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC). The House passed it in July 2025, but it is not law. It still needs Senate approval and a presidential signature.

What is the Clarity Act, in plain terms?

For more than a decade, US crypto rules have come mostly from enforcement actions and court fights rather than from a statute written for digital assets. The main question was always the same: is a given token a security (SEC territory) or a commodity (CFTC territory)? Regulators and companies disagreed, and judges reached different answers in different cases.

The Clarity Act tries to settle that question in law. It is what Washington calls a “market structure” bill.

What is market structure?

Market structure is the rulebook for the plumbing of a market. It covers who regulates which assets, which businesses must register (exchanges, brokers, dealers, custodians), what they must disclose, and how customer money must be held. Stock markets have had this framework since the Securities Exchange Act of 1934. Spot crypto markets, where people buy and sell actual tokens rather than futures contracts, never got an equivalent federal framework. The Clarity Act is Congress’s attempt to write one.

How the Clarity Act would work

The House-passed text, introduced on May 29, 2025 by House Financial Services Committee Chairman French Hill, builds on an earlier bill called FIT21, which passed the House 279-136 in May 2024 but died in the Senate. Its core mechanics:

It creates a “digital commodity” category. A digital commodity is defined as a digital asset whose value is tied to the use of a blockchain. Spot trading in these assets would fall under the CFTC. Stablecoins covered by the GENIUS Act and assets that are clearly securities are carved out.

It keeps the SEC in charge of fundraising. When a project sells tokens to raise money, the SEC still oversees that sale and the disclosures that go with it. The bill gives issuers an exemption to raise money, up to $50 million in a 12-month period under the House text, if they meet disclosure requirements.

It introduces the idea of a “mature” blockchain. A blockchain is mature when no single person or group under common control runs it. Once a network reaches that point, its token is treated as a digital commodity rather than an investment tied to a company’s efforts. Insiders face limits on selling their tokens before maturity.

It requires crypto businesses to register. Exchanges, brokers and dealers handling digital commodities would register with the CFTC. They would have to separate customer assets from company assets, manage conflicts of interest and give disclosures. These requirements respond directly to the FTX collapse, where customer funds were mixed with the firm’s own money.

It applies anti-money-laundering rules. Registered firms would be treated as financial institutions under the Bank Secrecy Act.

It protects self-custody and some software developers. The House text affirms that individuals can hold their own crypto and transact peer to peer, and it shields developers who write code but never control users’ funds.

Who would regulate what

Where the bill stands

Here is the path so far, based on the congressional record and committee announcements.

The Senate split the work because two committees share jurisdiction. Banking handles the SEC side, and Agriculture handles the CFTC side. Senate Republican leads Cynthia Lummis, John Boozman and Tim Scott have since released what they called final Clarity Act text intended to merge those pieces. A released text is not a passed bill, though. The authoritative record is the bill’s page on Congress.gov, which lists every official action.

What is holding it up

Three disputes have slowed the Senate:

1. Stablecoin rewards. The GENIUS Act bars stablecoin issuers from paying interest. Banking groups argue that exchanges paying “rewards” on stablecoin balances is a loophole that could pull deposits out of banks. Crypto firms want those rewards kept. Coinbase withdrew its support for the Senate Banking draft in January 2026 partly over this issue, which contributed to the markup delay.
2. Ethics rules. Many Senate Democrats want limits on senior officials, including the president, profiting from crypto ventures, given the president’s family’s crypto businesses.
3. DeFi and illicit finance. Lawmakers disagree on how much decentralized finance should be covered by anti-money-laundering obligations.

Will the Clarity Act pass?

It has gone further than any previous crypto market structure bill, and the White House supports the effort. Even so, passage is not assured. Most bills need 60 votes to clear a Senate filibuster, and Republicans hold 53 seats, so at least seven Democrats must sign on. If the Senate passes a version that differs from the House text, the two chambers must reconcile it before it goes to the president. The 2026 midterm calendar also shrinks the floor time available.

Our read: a bill with real bipartisan support in the House and a negotiated Senate text is a serious candidate, but anyone treating it as a done deal is ahead of the facts.

What it would and would not change for you

If enacted, the Clarity Act would bring federal registration, segregation of customer funds and disclosure rules to US crypto exchanges. That could reduce the risk of an FTX-style collapse where customer money disappears into the company’s own accounts.

It would not:

• Make crypto safe or stable. Prices can still drop sharply, and a token can still go to zero.
• Add insurance. No provision gives crypto holdings FDIC or SIPC coverage.
• Change your taxes. The IRS treats crypto as property under IRS Notice 2014-21, so selling, swapping or spending it can trigger a capital gain or loss. Separately, brokers began reporting gross proceeds on the new Form 1099-DA for sales starting January 1, 2025, with cost basis reporting for assets acquired starting January 1, 2026.
• Erase fraud. Scammers already pitch “Clarity Act approved” or “government regulated” tokens. No law approves an investment, and promised guaranteed returns are a classic marker of a Ponzi scheme.

Protect yourself while the law is pending

Until a market structure law takes effect, oversight of crypto platforms comes from a patchwork of state money transmitter licenses, FinCEN registration and SEC or CFTC rules for specific products.

FAQ

What is the Clarity Act in crypto?

It is a federal bill, the Digital Asset Market Clarity Act of 2025, that would create rules for crypto markets. It gives the CFTC oversight of spot trading in digital commodities and keeps token fundraising under the SEC.

Is the Clarity Act law yet?

No. The House passed it on July 17, 2025, but as of early 2026 the Senate had not passed it. Check the bill’s Congress.gov page for the latest action.

What is the difference between the Clarity Act and the GENIUS Act?

The GENIUS Act covers payment stablecoins and became law on July 18, 2025. The Clarity Act covers the broader crypto market, including exchanges, brokers and how tokens are classified.

Does the Clarity Act change how crypto is taxed?

No. Tax treatment comes from the IRS, which treats crypto as property. Gains and losses are reported whether or not the bill passes.

Would the Clarity Act insure my crypto?

No. It would add registration and customer fund segregation rules for platforms, but crypto would still not be FDIC or SIPC insured, and its value can fall to zero.

Why is it called a market structure bill?

Market structure refers to the rules governing a market’s participants: which agency regulates which assets, who must register, and how customer money is held. The Clarity Act writes those rules for crypto.

Written byNadia ColeStaff writer, crypto taxes and regulation

Nadia covers crypto taxes, scams and the rules around digital assets: IRS guidance, broker reporting, federal and state regulation, and how to spot and report fraud. She separates what is law from what is only proposed and links the official text.

Fact-checked byRuth AdlerStandards Editor

Ruth is US Financer's standards editor. Every article goes through her checks before and after it is published: each rate, fee, cap, deadline and rule is matched against its primary source, every law named is linked to its official text, and anything that cannot be…