State of Crypto: The Senate Responds to the CLARITY Act.

Washington, D.C., July 26, 2025 — With the House having passed the Digital Asset Market Structure CLARITY Act on July 17, the bill now enters the Senate’s spotlight—bringing the U.S. one step closer to codifying comprehensive crypto market structure rules.

What the CLARITY Act Proposes

The bill seeks to clearly define which federal agency regulates which digital asset. Under its framework, tokens considered securities fall under the SEC’s jurisdiction, while those deemed digital commodities—including Bitcoin and Ether—are assigned to the CFTC.

It also mandates robust disclosure requirements for token issuers, covering ownership, fund usage, and twice-yearly updates on market status.

Senate Actions & Timeline

The Senate Banking Committee, led by Senators Tim Scott and Cynthia Lummis, has released a 35-page discussion draft that expands on the House’s version. It introduces refined definitions and emphasizes regulation around “ancillary assets” and anti–money-laundering compliance.

Chairman Scott has signaled an intention to reach final Senate passage by September 30, saying work will proceed in coordination with the Senate Agriculture Committee, which also must weigh in on the bill.

Reactions from the Hill

Supporters argue the CLARITY Act brings the regulatory certainty needed to spur innovation and institutional participation in crypto markets. Many crypto companies and advocates welcome clearer jurisdictional lines, saying uncertainty has delayed venture capital, platform launches, and token offerings.

Rep. John Rose called the bill “modern solutions to a modern financial sector,” emphasizing enhanced consumer protections and agency accountability.

Critics, including Democratic lawmakers and policy experts, raise alarms about weakening investor safeguards. Senator Elizabeth Warren and Rep. Maxine Waters warn the bill is overly permissive, potentially favoring big tech and crypto corporations at the expense of retail investor protection.

Some former SEC and CFTC officials question whether a bifurcated oversight model will create more confusion than clarity, urging tighter coordination between agencies.

The Broader Crypto Policy Landscape

The CLARITY Act is one component of a larger legislative push dubbed “Crypto Week,” which also includes the GENIUS Act for stablecoins and the Anti-CBDC Surveillance State Act—both already passed by the House.

The GENIUS Act, now signed into law by President Trump, creates federal standards for stablecoin issuance, including 1:1 backing, third-party audits, and anti-money-laundering requirements.

Simultaneously, the Senate Banking Committee is developing its own draft to complement the CLARITY Act, with a focus on refining classification rules, licensing crypto firms, and setting standards around asset disclosures.

A federal crypto policy report is also expected from the White House by July 22, shaping regulatory guidance around innovation, transparency, and consumer protection.

What’s at Stake

Consideration Implication
Regulatory Certainty Enables clearer rules for exchanges, token issuers, and institutional investment
Oversight Structure Defines SEC (securities) vs. CFTC (commodities) roles
Investor and Consumer Rights Introduces disclosure mandates vs. concerns over weak protections
Timeline Senate review ongoing; key votes and amendments expected by September

Final Thoughts

The Senate’s response to the CLARITY Act reflects a balancing act: embedding regulatory clarity without compromising consumer protections. The Senate Banking Committee’s draft signals continued refinement and negotiation. If enacted alongside the GENIUS Act, the CLARITY Act could mark a pivotal shift in U.S. crypto regulation—ushering in a new era of legitimacy, compliance, and innovation.

The coming months will be crucial as Congress finalizes definitions, adjusts agency powers, and sets the tone for America’s leadership in the global digital economy.