U.S. Senate Banking Committee: CLARITY bill drafted through industry input and bipartisan talks to provide regulatory clarity for crypto assets

The U.S. Senate Committee on Banking, Housing, and Urban Affairs has formally laid out the purpose of, and key issues surrounding, the CLARITY bill, which aims to overhaul the broader regulatory framework for the crypto-asset market.

In a statement released through its official channels on the 13th (local time), the committee said the market-structure legislation—known as the CLARITY (CLARITY) bill—was crafted after months of bipartisan negotiations and discussions with regulators, law enforcement, academia and industry. The committee said it plans to begin the markup process on the bill in the near future.

The committee argued that today’s digital-asset market is operating under a fragmented supervisory regime and outdated rules. It said the CLARITY bill is intended to establish clear, enforceable regulatory standards with the goals of investor protection, attracting innovation to the U.S., and strengthening national security.

The bill, based on existing securities-law principles, would clearly distinguish between securities and commodities among digital assets. Digital assets deemed securities would be subject to the Securities and Exchange Commission’s (SEC) disclosure requirements, resale restrictions and anti-evasion provisions, and the SEC’s enforcement authority would be preserved. The committee said claims that investor protections would be weakened are not true.

It also rejected criticism related to financial-system risk. The committee said the CLARITY bill focuses on preventing a second FTX-style collapse by creating a regulatory framework that can punish fraud, price manipulation and market abuse. It added that the absence of regulation poses an even greater risk to investors and the financial system.

On jurisdiction, the bill would clearly delineate the roles of the SEC and the Commodity Futures Trading Commission (CFTC) and establish a joint advisory committee to prevent regulatory gaps and avoidance. On illicit finance and national security, it would strengthen anti-money-laundering measures, counter-terrorist financing and sanctions implementation, and grant the Treasury Department authority to respond to high-risk overseas activities.

Regarding decentralized finance, it said the approach would target illegal activity while protecting lawful software development and innovation. Developers who do not control customer funds would not be treated as financial intermediaries, and the bill would not ban self-custody wallets or criminalize developers.

The committee also pushed back against claims that the CLARITY bill serves industry interests, stressing that its purpose is to reduce uncertainty and strengthen enforcement in order to protect investors, the financial system and national security at the same time.