What is the CLARITY Act?
The CLARITY Act — formally the Digital Asset Market CLARITY Act, H.R. 3633 in the 119th Congress — is a proposed U.S. federal law that would create the first comprehensive market-structure framework for crypto assets. It would split regulatory authority between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), define when a token counts as a "digital commodity" rather than a security, and set registration, custody, and disclosure requirements for crypto exchanges, brokers, and dealers. As of July 20, 2026, it has passed the House and cleared the Senate Banking Committee, but has not passed the full Senate or been signed into law.
Why does crypto need a law like this?
For over a decade, U.S. crypto companies have operated under securities and commodities laws written for stocks, bonds, and physical commodities — long before blockchains existed. That's left basic questions unanswered: Is a given token a security, a commodity, or something else? Which regulator — the SEC or the CFTC — actually has jurisdiction over a given exchange or trading desk? What does "compliant" custody or disclosure even look like for a digital asset?
Without clear rules, companies have faced enforcement actions built on case-by-case interpretation rather than a codified standard, and many have relocated operations offshore rather than operate in that uncertainty. The CLARITY Act is Congress's attempt to replace that ambiguity with an explicit statutory framework. You can see exactly how it does that in our section-by-section breakdown.
Who wrote it, and where did it come from?
H.R. 3633 was introduced in the House in 2025 and moved through the House Financial Services Committee before passing the full House 294–134 in July 2025 — a notably bipartisan margin for a financial-regulation bill. It then moved to the Senate, where the Banking, Housing and Urban Affairs Committee advanced it 15–9. The Senate Agriculture Committee, which shares jurisdiction over commodities markets, has also worked on companion text, and reconciling the two chambers' committees has been part of what's slowed a final Senate floor vote. For the day-by-day account, see our Timeline & Updates page.
What would actually change if it passes?
At a high level, three things:
- A jurisdictional split. The CFTC would get clear, exclusive authority over "digital commodity" spot markets — trading that happens through registered digital commodity exchanges, brokers, and dealers. The SEC would keep authority over investment contracts involving digital assets and retain general anti-fraud powers across the market.
- A path out of securities treatment. Digital commodities and "permitted payment stablecoins" would be excluded from the legal definition of a security. Whether a token qualifies depends partly on how decentralized and mature its underlying blockchain system is — a concept the bill calls a "mature blockchain system." See the glossary for the precise definitions.
- New registration and compliance obligations. Exchanges, brokers, and dealers dealing in digital commodities would need to register with the CFTC (or SEC, depending on activity), meet capital requirements, custody customer funds with qualified custodians, and run anti-money-laundering programs under the Bank Secrecy Act.
None of this is guessing — it's drawn directly from the bill text and the House Financial Services Committee's official section-by-section summary, both linked from our Resources page.
Who is affected?
Builders & token issuers
New disclosure obligations during a token's early, less-decentralized phase, with those obligations easing as the network matures — plus explicit exemptions for pure software development and validation work.
Exchanges, brokers & dealers
A defined registration pathway with capital, custody, and AML requirements — replacing today's patchwork of state money-transmitter licenses and uncertain federal status.
Investors & traders
Clearer disclosure standards and custody protections at registered platforms, plus (in theory) less risk of a platform being shut down mid-operation over unresolved jurisdictional disputes.
DeFi developers
Carve-outs for wallet software, validators, and blockchain infrastructure — one of the most contested pieces of the bill, still being negotiated in the Senate. Anti-fraud liability applies regardless.
Has the CLARITY Act passed?
No — not yet, as of July 20, 2026. The CLARITY Act has passed the House of Representatives and advanced out of the Senate Banking Committee, but it still needs to clear a full Senate floor vote (which requires 60 votes) and be signed by the President before it becomes law. Unresolved disputes over presidential-ethics provisions, DeFi developer treatment, and stablecoin yield are currently holding up a floor vote.
Because this is moving quickly, treat any specific vote count or date on this page as a snapshot rather than the live answer — our Timeline & Updates page is updated as the bill's status changes, and congress.gov is the authoritative record.
Curious where your token or project stands?
Our free Token Classification Quiz walks through the same factors — decentralization, control, and how a token was sold — that the CLARITY Act uses to separate digital commodities from securities. It's educational, not a legal opinion, but it's a genuinely useful starting point. For the exact legal mechanics, jump to the section-by-section breakdown, or check the FAQ for quick answers to common questions.