The U.S. Senate Banking Committee advanced the Digital Asset Market Clarity Act (CLARITY Act) on May 14, 2026, by a 15-9 vote, sending the most consequential piece of crypto market-structure legislation to the full Senate floor. The bill, which passed the House 294-134 in July 2025, would split d...
"For years, the digital frontier was trapped in a regulatory gray zone. Developers, entrepreneurs and investors were left with uncertainty. They faced confusion and enforcement actions, when instead, the government should have been crafting clear rules of the road." — Senator Tim Scott, Chairman, Senate Banking Committee
The U.S. Senate Banking Committee advanced the Digital Asset Market Clarity Act (CLARITY Act) on May 14, 2026, by a 15-9 vote, sending the most consequential piece of crypto market-structure legislation to the full Senate floor. The bill, which passed the House 294-134 in July 2025, would split digital-asset oversight between the SEC and CFTC, create a registration regime for digital-commodity intermediaries, and mandate customer-fund segregation rules across the $3 trillion global digital-asset market.
Two Democrats — Senators Ruben Gallego (AZ) and Angela Alsobrooks (MD) — crossed party lines to vote with all 13 Republicans on the committee. Over 100 amendments were filed ahead of markup. All Democratic amendments were either voted down or procedurally blocked. The bill now faces a filibuster threshold of 60 votes on the Senate floor, with unresolved disputes over ethics provisions, DeFi anti-money laundering obligations, and state regulatory preemption standing between committee passage and enactment. The White House has targeted a July 4, 2026 signing, but reconciliation with the Senate Agriculture Committee's companion bill — the Digital Commodity Intermediaries Act — has not begun.
The Senate Banking Committee convened on May 14, 2026, for a markup session that lasted several hours. Chairman Tim Scott (R-SC) opened by framing the legislation as a corrective to years of "enforcement-first, rules-later" regulatory posture. The committee voted 15-9 to advance the bill, strictly along party lines except for Gallego and Alsobrooks.
Senator Alsobrooks conditioned her support. According to CoinDesk's live coverage of the hearing, she stated her committee vote would not automatically translate into a floor vote unless outstanding issues — specifically ethics and illicit-finance provisions — were addressed before the full Senate takes up the measure.
The bill had already cleared the House on July 17, 2025, with a bipartisan 294-134 vote. All 216 House Republicans supported the measure, joined by 78 Democrats. The Senate committee vote was the bill's second major legislative hurdle.
The CLARITY Act establishes a three-category taxonomy for digital assets:
Digital Commodities — Tokens tied to decentralized blockchains (e.g., Bitcoin, Ether post-sufficient decentralization). The CFTC receives exclusive jurisdiction over spot and cash markets. This represents a major expansion for an agency that has historically regulated only derivatives.
Investment Contract Assets — Tokens representing equity, debt, or similar rights. The SEC retains jurisdiction under existing securities law.
Payment Stablecoins — Supervised by banking regulators under the framework established by the GENIUS Act, signed into law on July 18, 2025.
The bill mandates registration for digital-commodity brokers, dealers, and exchanges within 90 days of enactment, with the CFTC required to establish an expedited registration process within 180 days. It prohibits the commingling of customer and firm funds, requires segregation of customer assets, and imposes capital and liquidity requirements.
A provision called "Regulation Crypto" creates a fundraising exemption for ancillary assets offered in connection with an investment contract, allowing issuers to raise capital from retail investors without full SEC registration — provided ongoing disclosure requirements are met, including source-code transparency, tokenomics documentation, and token-distribution schedules.
Senators filed more than 100 amendments to the CLARITY Act ahead of the May 14 markup, according to reporting by The Block. Virtually none were incorporated.
The amendments fell into three broad categories:
Ethics and conflicts of interest — Senator Chris Van Hollen (D-MD) proposed eight amendments, including one banning the president, vice president, and members of Congress from owning, promoting, or affiliating with digital-asset businesses. The committee rejected it 13-11 on a party-line vote.
DeFi and illicit finance — Senator Mark Warner (D-VA) proposed a "control test" to determine when operators of non-decentralized finance trading protocols are subject to Bank Secrecy Act anti-money laundering obligations.
Consumer protection and state authority — Multiple Democratic senators sought to preserve state-level enforcement powers and strengthen investor protections beyond what the bill provides.
Chairman Scott ruled several amendments out of order on procedural grounds. According to CoinDesk's reporting, Scott stated some amendments were "not written correctly" and declined to allow them to be offered.
The ethics question has emerged as the bill's central political obstacle. Senator Elizabeth Warren (D-MA), the committee's ranking member, cited an estimated $1.4 billion in crypto-related gains by President Trump and his family since taking office. In her opening statement at the markup, Warren said the bill "doesn't lift even the tiniest finger to address the Trump Administration's crypto-related corruption."
Senator Kirsten Gillibrand (D-NY), a key swing vote who has co-authored previous bipartisan crypto legislation, drew a firm line at the Consensus 2026 conference in Miami. "There will be no one voting for this bill if we don't have an ethics provision," Gillibrand stated. "This provision will be part of this bill, or it will not go forward."
The White House has rejected provisions targeting the president specifically. White House adviser Patrick Witt described the administration's position as favoring rules that apply "across the board, from the president all the way down to the brand new intern on Capitol Hill," according to reporting by Unchained Crypto.
The math is straightforward: the bill needs 60 Senate votes to clear a filibuster. Republicans hold 53 seats. Without at least 7 Democratic votes, the bill dies on the floor. Gillibrand's position suggests the ethics provision is a prerequisite for most Democratic support.
A May 18, 2026, CoinDesk analysis flagged concerns about how last-minute negotiations may affect DeFi protocols. Senator Warner's proposed amendment — titled "Responsible Innovation in Decentralized Finance" — would direct the Treasury Department to write rules clarifying when persons or groups controlling the operation of "non-decentralized finance trading" protocols must comply with securities law and Bank Secrecy Act obligations.
The amendment introduces a "control test" — a framework for determining whether a protocol is genuinely decentralized or operated by an identifiable group. Protocols that fail the test would be subject to the same registration and compliance requirements as centralized intermediaries.
While Warner's amendment was not adopted in committee, the underlying question remains live. Both Senate committees — Banking and Agriculture — are expected to negotiate DeFi treatment as they merge their respective bills. Industry groups have flagged the risk that a broad control test could impose compliance burdens on protocol developers, DAO contributors, and front-end operators who currently operate outside the regulated perimeter.
The North American Securities Administrators Association (NASAA), representing state securities regulators across the U.S., Canada, and Mexico, formally urged a "no" vote ahead of the committee markup. In a May 12, 2026 letter, NASAA stated it was "unable to support the CLARITY Act in its current form."
NASAA's objections centered on three issues:
In March 2026, 31 state regulators had separately written to Chairman Scott urging Congress to preserve their role as "fraud fighters" in any federal market-structure legislation.
The CLARITY Act's legislative progress has been accompanied by significant industry spending. According to reporting by Fortune and CoinDesk:
On the opposing side, banking industry groups spent $56.7 million on lobbying in 2025, with traditional financial institutions concerned about the competitive implications of a regulatory framework that could legitimize crypto intermediaries as direct competitors to incumbent brokerages and custodians.
The bill faces a multi-step process before reaching the president's desk:
| Step | Status | Timeline | |------|--------|----------| | House passage (H.R. 3633) | Complete | July 17, 2025 | | Senate Banking Committee markup | Complete | May 14, 2026 | | Senate Ag Committee markup (DCIA) | Complete | January 29, 2026 | | Banking-Ag bill merger | Not started | TBD | | Senate floor vote (60 votes required) | Pending | June-July 2026 target | | House-Senate reconciliation | Pending | TBD | | Presidential signature | Pending | July 4 target per White House |
The White House has pushed for a July 4 signing, according to Unchained Crypto. That timeline requires the Banking and Agriculture committees to merge their bills, negotiate ethics language acceptable to at least 7 Democrats, and secure floor time before the Memorial Day recess (which begins May 21, 2026) or shortly after.
Senator Gillibrand and other observers have cited August as the realistic outer boundary. Every congressional observer covering the legislation points to the same hard deadline: the November 2026 midterm elections. If Republicans lose the Senate majority, the CLARITY Act's political dynamics change materially.
After enactment, SEC and CFTC rulemaking would take up to 18 months, with main implementing rules unlikely before late 2027.
The CLARITY Act's committee passage is the furthest any comprehensive crypto market-structure bill has advanced in the Senate. It is not, however, close to becoming law. The 15-9 vote demonstrated narrow bipartisan viability at the committee level but left the three issues most likely to determine the bill's fate — ethics, DeFi compliance, and state regulatory preemption — unresolved.
The arithmetic is fixed: 60 votes require Democratic cooperation. Democratic cooperation requires an ethics provision. The White House has rejected targeted ethics language. Until that impasse breaks, the CLARITY Act remains a committee-stage achievement with an uncertain path to enactment.
The November midterm deadline concentrates the timeline. If both chambers cannot reconcile their versions and secure 60 Senate votes before the election, the political window for this iteration of the bill may close entirely. Markets, exchanges, and protocol developers should plan for the possibility that federal regulatory clarity — despite a decade of industry demand — may remain pending through 2027.