Last Updated: October 16, 2026
The CLARITY Act, formally the Digital Asset Market Clarity Act of 2025 (H.R. 3633), is a bill that would split oversight of crypto markets between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). It passed the House in July 2025. On September 15, 2026, the Senate fell 11 votes short of the 60 needed to open debate, so it is not law.
Crypto investors often hear about the bill as a possible catalyst for tokens such as XRP. This guide explains what it would change, where it stands and what could happen next.
Key Takeaways
- The bill would give the CFTC authority over spot markets for “digital commodities” such as bitcoin and leave the SEC in charge of tokens sold as investment contracts.
- The House passed it 294-134 on July 17, 2025. The Senate Banking Committee approved its version 15-9 on May 14, 2026.
- A Senate cloture vote failed 49-50 on September 15, 2026. Democrats and independents present voted no, and four Republicans also voted no.
- The main disputes are ethics rules for officials’ crypto holdings, stablecoin rewards, and illicit finance and national security provisions.
- A motion to reconsider keeps the bill alive, but no new vote is scheduled, and the Senate is out until after the November midterms. Meanwhile, the SEC and CFTC are writing their own crypto rules.
What Is the CLARITY Act?
For more than a decade, U.S. law has not clearly said when a crypto asset is a security and when it is a commodity. The SEC and the CFTC have both claimed jurisdiction, and courts have reached inconsistent results. The bill tries to settle that question by writing a regulatory framework for digital asset markets into federal law.
In practice, it would decide which agency registers crypto exchanges and brokers, which rules protect customers, and how decentralized finance (DeFi) fits in. That is why the industry treats it as the most important crypto bill in Congress after the GENIUS Act, which became law in July 2025 and covers payment stablecoins.
What the Bill Would Do
- Define digital commodities: Tokens on a sufficiently decentralized, or “mature,” blockchain would be treated as digital commodities under CFTC oversight. Under the House version, no single person or group could control 20% or more of a token’s supply or governance.
- Give the CFTC spot market authority: The CFTC would register digital commodity exchanges, brokers and dealers. Today, many platforms face uncertainty about whether they must instead register with the SEC as national securities exchanges or broker-dealers.
- Keep the SEC’s role over investment contracts: Tokens sold as part of an investment contract would remain under SEC rules, including disclosure requirements for issuers.
- Set customer protections: Registered platforms would have to meet rules on customer asset protection, conflicts of interest and risk management. The Senate Banking text of May 2026 also added an insolvency safe harbor.
- Address DeFi and developers: The House bill excludes certain DeFi activities and developers who do not control user funds. Later Senate drafts called for tailored rules for people who control DeFi trading protocols.
- Limit stablecoin rewards: The May 2026 committee compromise bars yield on idle stablecoin balances but allows rewards tied to activity. Banks and crypto firms still disagree on where that line should sit.
Timeline: How We Got Here
- May 29, 2025: Rep. French Hill of Arkansas introduces H.R. 3633.
- July 17, 2025: The House passes the bill 294-134, with 78 Democrats voting yes.
- January 12, 2026: The Senate Banking Committee releases a 278-page draft of its version.
- January 29, 2026: The Senate Agriculture Committee advances its companion bill, the Digital Commodity Intermediaries Act, 12-11 along party lines.
- May 14, 2026: Senate Banking approves its version 15-9. Democrats Ruben Gallego and Angela Alsobrooks join all 13 Republicans, while saying their votes did not guarantee floor support without an ethics deal.
- June 1, 2026: The bill is placed on the Senate Legislative Calendar, making it eligible for a floor vote.
- August 2026: The Senate leaves for its August recess without a vote.
- September 15, 2026: Cloture on the motion to proceed fails 49-50, short of the 60 votes required.
- September 17, 2026: Seven Democratic negotiators call the result “a setback, but not the end.” The SEC and CFTC announce new crypto actions the same day.
- October 14, 2026: Patrick Witt, executive director of the White House crypto council, leaves the post when his temporary detail ends. No successor is named.
Why the Senate Vote Failed
The fight was not mainly about how to divide work between the SEC and the CFTC. The biggest obstacle was ethics. Democrats wanted rules on crypto holdings by federal officials and their families that would clearly cover the president, and they said the final text fell short. Republicans pointed to more than 100 revisions made at Democrats’ request.
Two other disputes stayed open. Banks want tight limits on stablecoin rewards because they fear deposits would move out of bank accounts, while crypto firms want room to pay rewards. Some senators also raised concerns about illicit finance, consumer protection and national security.
Democrats and independents present voted against the motion, and four Republicans also voted no. One of them, Sen. Thom Tillis of North Carolina, voted no so that he could enter a motion to reconsider, which keeps a path open to bring the bill back.
What Regulators Are Doing Instead
Two days after the vote, both agencies moved under their existing powers:
- SEC: On September 17, the SEC issued a five-year conditional exemption that lets approved venues trade tokenized versions of listed U.S. stocks. Read more in our coverage of the SEC Innovation Exemption and our guide to tokenized stocks.
- CFTC: The same day, the CFTC sent a proposed rule on crypto asset transactions and markets to the White House for review, and its staff issued no-action relief for passive software providers.
- SEC rulemaking: The SEC’s “Regulation Crypto Assets” proposal, published August 18, 2026, would create two registration exemptions for crypto investment contracts. Public comments are due October 20, 2026.
Agency rules are less durable than a law. A future commission can revise them, and courts can strike them down. Law firm Orrick also notes that binding CFTC rules may be more than a year away.
What Happens Next
Under Senate rules, only a senator who voted on the winning side of a failed cloture vote can move to reconsider it, which is why Tillis’s no vote matters. No new vote is scheduled. The Senate’s state work period tentatively runs from October 5 to November 6, ending after the November 3 midterm elections, so the earliest realistic window is the lame-duck session.
Markets see a slim chance of quick passage. On September 24, Polymarket priced the bill becoming law by the end of 2026 at about 7%. On October 15, Kalshi traders gave about 29% odds of a market structure law before 2028. Track these shifts in our report on Polymarket odds and in crypto news today.
To pass, Senate leaders would need a new deal on ethics and stablecoin rewards that brings at least 60 senators on board. The Senate version would then have to be reconciled with the House bill and signed by the president.
This article is for informational purposes only and does not constitute financial or legal advice. Regulatory developments are ongoing. Always verify the current status through official government sources before making decisions.
FAQ
Did the CLARITY Act pass the Senate?
No. On September 15, 2026, a Senate cloture vote on the bill failed 49-50, 11 votes short of the 60 needed to open debate. The House passed the bill 294-134 in July 2025, but the Senate has not, so the CLARITY Act is not law.
Why did the CLARITY Act fail in the Senate?
The main obstacle was ethics. Democrats wanted rules on federal officials’ crypto holdings that clearly covered the president and his family, and they said the final text fell short. Disputes over stablecoin rewards and concerns about illicit finance and national security also remained. Democrats and independents present voted no, along with four Republicans.
Is the CLARITY Act dead?
Not formally. Sen. Thom Tillis entered a motion to reconsider, which keeps a path open, and seven Democratic negotiators called the vote “a setback, but not the end.” No new vote is scheduled, however, and the Senate is in a state work period until November 6, after the midterms, so the lame-duck session is the earliest realistic window.
When will the CLARITY Act be voted on again?
There is no date. A new vote would need a deal on ethics and stablecoin rewards that wins at least 60 senators. Prediction markets see slim odds. In late September, Polymarket priced passage by the end of 2026 at about 7%, and on October 15, Kalshi traders put the odds of a market structure law before 2028 at about 29%.
What would the CLARITY Act change for crypto?
It would give the CFTC authority over spot markets for digital commodities such as bitcoin and require crypto exchanges, brokers and dealers to register with it. The SEC would keep oversight of tokens sold as investment contracts. The bill also sets customer protections, addresses DeFi and software developers, and limits yield on idle stablecoin balances.
How is the CLARITY Act different from the GENIUS Act?
The GENIUS Act became law in July 2025 and covers payment stablecoins, including who can issue them and what reserves they must hold. The CLARITY Act is broader. It would decide which agency, the SEC or the CFTC, oversees the rest of the crypto market, from tokens and exchanges to DeFi.
