The CLARITY Act stalled in the Senate. Here is what changes, and what doesn't

The Senate's September 15 vote to open debate on the CLARITY Act failed 49-50, leaving the US without a comprehensive crypto market-structure law for at least the rest of 2026. Regulators are now trying to fill the gap with their own rules, but some of the bill's most user-relevant protections can only come from Congress.

What happened

The Digital Asset Market Clarity Act (H.R. 3633) passed the House on July 17, 2025 by a vote of 294-134. In the Senate it moved through the Banking Committee in 2026 and was reported with a substitute text on June 1, according to the official bill record on Congress.gov.

Senate Majority Leader John Thune filed for cloture on the motion to proceed on August 8. Cloture is the procedural step that needs 60 votes before the Senate can even begin debating a bill. Two days before the vote, Senate Republicans released a revised 635-page substitute that, per Paul Hastings' policy tracker, updated the government-ethics language, added a "circuit breaker" to the ban on interest and yield for payment stablecoins, and reworked provisions for software developers.

On September 15 the motion failed 49-50, with one senator not voting. DLA Piper reports that Republican Senators Susan Collins, Josh Hawley and Jerry Moran voted no alongside Democrats. Senator Thom Tillis then entered a motion to reconsider, a procedural move that technically lets the vote be revisited later.

Why it failed

Opponents raised several separate objections, which matters because it shows how much would need to change for a future version to pass. Based on DLA Piper's summary of senators' statements, the main sticking points were:

• Ethics rules for officials. Critics said the provisions mainly covered officials launching new tokens and left out income from existing ventures and memecoin operations. They also objected to a sunset date of January 20, 2029.
• Consumer protection and illicit finance. A group of seven Democratic negotiators said both areas "must be strengthened."
• State authority. A bipartisan group of 18 state attorneys general warned the bill could weaken states' power to police crypto fraud. DLA Piper notes states have brought more than 330 digital-asset anti-fraud actions since 2017.
• Enforcement structure. The ethics provisions gave enforcement only to the Department of Justice, which some senators said was not independent enough.

Industry reaction was blunt. Ripple, for example, called the result a "missed opportunity" and said the banking lobby and narrow industry interests both contributed to the outcome. That is one company's view, but it reflects how contested the final text was.

What the bill would have done

CLARITY was meant to settle a question that has hung over US crypto for years: which tokens and trading venues fall under the SEC (securities rules) and which fall under the CFTC (commodities rules). According to Troutman's analysis, the bill would have:

• Split assets into "digital commodities" and "investment contract assets," with a defined path for deciding which regulator applies.
• Created CFTC registration for spot crypto exchanges, brokers and dealers. Today the CFTC can pursue fraud and manipulation in spot crypto markets, but it has no general power to license and supervise those businesses.
• Amended the Bankruptcy Code so crypto held for customers counts as "customer property" in a Chapter 7 liquidation.
• Brought crypto platforms clearly under the Bank Secrecy Act as financial institutions.

Regulators are moving without Congress

The agencies did not wait for the vote. On August 18, 2026 the SEC proposed "Regulation Crypto Assets." The SEC's press release describes two new exemptions for certain crypto-related investment contracts: a one-time exemption for raises of up to $5 million over four years, and a larger one of up to $75 million in each 12-month period with financial statements and ongoing reporting. It also proposes a conditional safe harbor under which a token would no longer be treated as part of an investment contract once the issuer has finished, or permanently stopped, the essential work it promised.

The CFTC moved too. Troutman reports that on September 17, two days after the vote, the CFTC sent a pre-rule action called "Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets" to the White House regulatory review office. The same analysis expects two comment periods and says a binding rule is unlikely to take effect before late 2027. Also on September 17, CFTC staff extended no-action relief to "passive software providers," such as self-custody wallet apps that only pass users' own orders to registered venues.

The limits of agency rules

Agency rules can do a lot, but not everything. Troutman's analysis highlights three gaps:

1. No spot-exchange license. Without a new statute, the CFTC cannot require ordinary spot crypto exchanges to register. Its proposed approach reaches leveraged or margined trading, not fully paid spot purchases.
2. No bankruptcy fix. Only Congress can change the Bankruptcy Code. The customer-property priority CLARITY proposed cannot come from a regulator.
3. Less durability. A future SEC or CFTC can rewrite agency rules, and courts can strike them down if an agency goes beyond its authority.

What it means for regular users

Day to day, nothing changed on September 15. You can still buy, hold and sell crypto through the same platforms. What the vote did is delay a federal rulebook that would have made some protections uniform.

• Exchange custody risk stays as it was. If a platform fails, what happens to your coins still depends on its terms of service, where it is chartered and how a bankruptcy court reads those facts. Reduce that risk by moving long-term holdings to a wallet you control. Our guide to crypto wallets explains the options.
• State rules still matter. State money-transmitter licenses and state regulators such as New York's remain a key layer of oversight. Check a platform's licenses before you sign up; our exchange reviews and safe-buying guide show what to look for.
• Token classification is still case by case. Some assets have more certainty than others. Ripple, for instance, points to a March 2026 joint SEC-CFTC interpretation naming XRP a digital commodity. Most tokens have no such statement.

What to watch next

• Comment deadlines. The SEC's Regulation Crypto Assets proposal has a 60-day comment window after Federal Register publication. Public comments will shape the final rule.
• The CFTC's draft text. Once White House review ends, the CFTC's proposed crypto-market rule should be published for comment. Watch how it defines a "crypto asset market" and which retail products it covers.
• The new Congress. The 120th Congress begins in January 2027. DLA Piper notes that market-structure legislation would generally need to be reintroduced and could come back as narrower standalone bills.
• Court challenges. Any agency rule that goes beyond existing law could face lawsuits, as earlier SEC rules did in the Fifth Circuit.

For an ongoing overview of US crypto rules, including taxes and state requirements, see our laws and regulations hub. All details here are as of October 2026.

Published October 4, 2026 by The Crypto Guide editorial team. Educational content, not financial, legal or tax advice. Spot an error? Request a correction.