Can One Bill Fix U.S. Crypto Rules? Inside the Push for the CLARITY Act

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Overview

• Bipartisan CLARITY Act seeks to replace crypto uncertainty with clear, enforceable regulatory rules.
• Bill defines digital assets as securities or commodities under existing U.S. legal frameworks.
• Strong safeguards target fraud, market manipulation, and illicit finance across crypto markets.

For years, the U.S. crypto industry has lived in a gray zone. Companies built, investors traded, and regulators argued, often without clear rules. Now, lawmakers say they are ready to end that confusion.

Senator Cynthia Lummis is pushing the Digital Asset Market CLARITY Act, a bipartisan bill she says could finally give digital assets the rulebook they have been missing. Her message is blunt: the industry cannot afford to wait any longer.

“When we put politics aside and focus on what’s best for America’s economic future, we can achieve real progress,” Lummis said while backing the bill.

What Problem is Congress Trying to Fix?

Today’s crypto market runs under fragmented oversight and rules written long before blockchains existed. Supporters of the CLARITY Act argue this uncertainty hurts investors and drives innovation offshore.

The bill will aim to simplify things by clearly answering a long-debated question: Is a digital asset a security or a commodity?

Using existing legal principles, the framework draws that line and assigns responsibility accordingly, securities to the Securities and Exchange Commission, commodities to the Commodity Futures Trading Commission.

Clearing up the Biggest Myths

Critics warn the bill could weaken protections or open loopholes. Supporters say those fears miss the point.

• Investor protections stay intact: Fraud remains illegal, disclosures are required, and regulators keep full enforcement powers.
• No free pass for bad actors: Market manipulation and abuse would be easier to punish under clearer rules.
• Fewer loopholes, not more: The bill closes gaps by coordinating oversight between the SEC and CFTC.

Lawmakers backing the proposal argue that uncertainty, not regulation, is the real risk.

Can it Prevent Another FTX?

Supporters believe so. The bill is designed to stop the kind of opaque behavior that led to past crypto collapses. Investors would have better information, insiders would face stricter limits, and enforcement would be clearer.

On national security, the proposal goes further. It expands anti-money laundering and counter-terrorism financing rules, strengthens sanctions compliance, and gives the Treasury Department more tools to address risky foreign activity.

What About DeFi and Developers?

This is where the bill tries to strike a balance. Writing code would not be criminalized, and self-custody would remain legal. At the same time, centralized intermediaries that interact with decentralized protocols would be required to manage risk and follow compliance rules.

The message is clear: code is protected, misconduct is not.

Backers say the CLARITY Act is the product of years of bipartisan work, not an industry giveaway. With global competition for financial innovation heating up, they argue the U.S. must decide whether it leads under clear rules or falls behind due to inaction.