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CLARITY Act Faces Senate Delay as Crypto Rules Remain Unsettled
The CLARITY Act cleared the House 294-134 but Senate floor time was postponed until after summer recess. Thune cited nominations and Russia sanctions as higher priorities.
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The CLARITY Act, the most ambitious attempt yet to give U.S. crypto firms a statutory map of which federal agency regulates digital assets, has hit a wall in the Senate. Majority Leader John Thune said July 27 there was no floor time before the summer recess. Nominations and Russia sanctions legislation took priority. The next window for a vote opens in September, if the schedule holds.
For more than a decade, crypto companies operated without a clear answer. The SEC treated some tokens as securities. The CFTC classified others as commodities. That overlap produced enforcement actions, court battles, and a steady drift of developers to clearer jurisdictions. Lawyers at Arnold and Porter called the result "regulation by enforcement" – companies learned their legal status through lawsuits, not advance rules.
The CLARITY Act, formally H.R. 3633, tries to fix that by creating three statutory categories. Digital commodities, tokens on blockchains deemed both functional and decentralized, fall under exclusive CFTC jurisdiction for spot market oversight. Investment contract assets, tokens that function like securities, remain under SEC authority. Permitted payment stablecoins are supervised by banking regulators under the GENIUS Act, which became law in July 2025.
The bill introduces a maturity test that evaluates when a blockchain has become sufficiently decentralized to shift a token from SEC to CFTC oversight. That transition mechanism has no equivalent in existing law. Exchanges, brokers, and custodians face new registration requirements and must segregate customer funds from company operations. User assets would be protected in bankruptcy, a direct response to the FTX collapse of November 2022. DeFi developers receive a safe harbor for non-custodial code and infrastructure.
The House passed the CLARITY Act in July 2025 by a vote of 294 to 134, including 78 Democrats. That was stronger bipartisan support than its predecessor, FIT21, which passed the House in May 2024 at 279 to 136 but stalled in the Senate before the 118th Congress ended.