The CLARITY Act Passes a Senate Committee and What It Would Change for Cryptocurrency Markets
The Digital Asset Market Clarity Act cleared the Senate Banking Committee in a 15 to 9 vote on May 15, advancing the most significant cryptocurrency market structure bill to emerge from a US legislative body in years. The legislation would establish a formal regulatory framework distinguishing digital commodities from digital securities, a division that has shaped nearly every major enforcement dispute between the SEC and cryptocurrency exchanges since 2017.
The vote puts a full Senate floor debate closer than any prior crypto market structure bill has reached.
What the CLARITY Act Does
The CLARITY Act, formally the Digital Asset Market Clarity Act, directs the Commodity Futures Trading Commission to regulate digital assets that function as commodities and retains SEC jurisdiction over digital assets that function as securities. The distinction matters practically because Bitcoin (BTC) and Ethereum (ETH) have long been treated by regulators and most market participants as commodities, while most tokens issued through fundraising events have been treated as securities.
The bill establishes a test for determining which category a digital asset falls into.
The test draws on whether the asset’s value depends primarily on the efforts of a third party, a principle rooted in the Howey test that US courts have applied to investment contracts since a 1946 Supreme Court ruling. Assets that pass the test fall under SEC oversight.
Assets that do not pass it fall under CFTC oversight. The bill also includes provisions for exchanges to register with both agencies and for issuers to disclose certain information regardless of classification.
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The Democratic Opposition
Nine committee members voted against the bill on May 15.
Opponents raised objections primarily focused on ethics concerns rather than the substance of the regulatory framework. Some Democrats on the committee linked opposition to President Donald Trump‘s personal cryptocurrency ventures, including the TRUMP memecoin launched in January 2026 and the Trump family’s involvement in World Liberty Financial, a decentralized finance project.
The concern articulated was that a president with direct financial interest in cryptocurrency markets was simultaneously pushing cryptocurrency-friendly legislation, creating a conflict of interest.
The ethics objections did not produce enough votes to block the committee passage. They are, however, expected to be a recurring argument during floor debate.
Background
The CLARITY Act builds on years of failed and partial attempts to establish US digital asset market structure legislation.
The prior Congress passed a version of crypto legislation in the House but could not advance it through the Senate. The current bill draws heavily from the Financial Innovation and Technology for the 21st Century Act, known as FIT21, which passed the House in May 2024 with bipartisan support but stalled before reaching a Senate vote.
The current legislative session opened with broader Republican majorities and explicit White House support for cryptocurrency-friendly regulation, creating conditions that prior sessions lacked.
The SEC under Chair Paul Atkins, who took office in early 2026 after a Senate confirmation, has adopted a noticeably softer enforcement posture toward cryptocurrency firms than his predecessor. That posture has reduced the perceived urgency of legislation for some industry participants who expected regulatory resolution through the courts.
The CLARITY Act would, if enacted, move the resolution from case-by-case litigation to statutory definition.
What Comes Next
A committee passage is not enactment. The bill must pass the full Senate, survive a conference with the House over any differences in text, and be signed by the president.
The Senate floor calendar is congested, and cryptocurrency legislation has historically moved slower than committee timelines suggest. The ethics debate around Trump-linked crypto assets could grow louder during floor proceedings, potentially requiring bill sponsors to seek additional Democratic votes through amendments.
For the cryptocurrency industry, the bill’s progress is meaningful regardless of final passage timeline.
A committee vote with 15 supporters signals that enough senators are willing to go on record backing a commodity-versus-security framework, which itself constrains how future SEC chairs could argue for broader jurisdiction. The CLARITY Act text, once available in its committee-passed form, will be the document exchanges and legal teams use to assess compliance exposure under the proposed structure.
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