Is the CLARITY Act law?

No. It passed the House 294-134 on July 17 2025 and cleared the Senate Banking Committee 15-9 on May 14 2026. It sits on the Senate Legislative Calendar as Calendar No. 423 with no floor vote scheduled and no cloture motion filed.

Was the CLARITY Act the first crypto market structure bill to pass a chamber of Congress?

No, and this is widely misreported. FIT21, H.R. 4763, passed the House 279-136 on May 22 2024 in the 118th Congress using the same SEC and CFTC split. It then died in the Senate. The CLARITY Act is the furthest such a bill has advanced, because it has also cleared a Senate committee.

What is the difference between the CLARITY Act and the GENIUS Act?

The GENIUS Act governs stablecoin issuance, reserves, and redemption. The CLARITY Act governs everything else, meaning which regulator oversees trading, custody, and disclosure for non-stablecoin digital assets. They are separate bills solving separate problems.

Who wrote the CLARITY Act?

Rep. French Hill (R-AR), chairman of the House Financial Services Committee, introduced H.R. 3633 on May 29 2025. The Senate rewrite has been led by Senator Tim Scott, Senator Cynthia Lummis, and Senator Bernie Moreno.

Does the CLARITY Act protect self-custody and DeFi?

Only partly. The merged text confirms that non-custodial developers are not money transmitters, which is a real protection for people writing code. Self-hosted wallets appear in the Senate text as one item among the considerations Treasury must weigh in an illicit-finance strategy, alongside fraud, cybersecurity and identity-verification risk. That is an acknowledgement, not the affirmative safe harbour self-custody advocates asked for.

CLARITY Act

What the CLARITY Act actually does

H.R. 3633 draws a line between digital commodities and digital securities, hands the commodity side to the CFTC, and leaves the securities side with the SEC. Where exactly the line sits depends on which version of the bill you read, and there are three of them in circulation.

Early Thunder Research|Updated 2026-07-27

The problem it was written to solve

For a decade, the question of whether a token is a security has been answered one enforcement action at a time. The SEC applied the Howey test case by case. The CFTC claimed bitcoin and ether as commodities. Nobody wrote down a rule that told a builder in advance which regulator they answered to.

The CLARITY Act writes that rule down. It is not the first attempt. FIT21 passed the House 279-136 in May 2024 with the same two-regulator architecture and then died in the Senate. What makes this one different is that it has also cleared a Senate committee, which FIT21 never did.

Read the version number before you read the analysis

Three documents get quoted as though they were one. The House-passed text of July 2025. The Senate Banking substitute reported on June 1 2026, which is an amendment in the nature of a substitute and therefore a different bill in the same wrapper. And the 616-page merged text Senator Lummis released on July 22 2026.

Definitions moved between them. A large share of the explainers circulating right now quote a 2025 Senate discussion draft that no longer governs anything. If a summary tells you what the CLARITY Act says without telling you which text it read, it is not reliable, and that includes summaries that sound confident.

Maturity, and the insider test underneath it

The core definition in the House text is short. A mature blockchain system is a blockchain system, together with its related digital commodity, that is not controlled by any person or group of persons under common control.

The working test sits separately, in the certification criteria added as Exchange Act Section 42. Those cover whether the system is functional, built on open-source code, running on pre-established transparent rules, free of anyone with unilateral authority to materially alter it, and distributed in ownership.

Two different 20 percent thresholds live in there, and neither is the rule most people repeat. One caps any single person at 20 percent of outstanding voting power. The other says the issuer, related persons and affiliated persons together must not beneficially own 20 percent or more of total units. Affiliated-person status keys off acquiring 5 percent or more from the issuer, related-person status off 1 percent.

So an unaffiliated whale holding 25 percent does not defeat maturity. Insider supply does. That distinction changes which tokens are actually at risk, and we ran it across our own 251-token scorecard.

What changes for an ordinary holder

Exchanges get a registration path that does not require them to guess which of their listings is a security, which is why delisting anything ambiguous has been the default risk-management move since 2023. Banks and brokerages get a rulebook they can hand to a compliance committee, which is the actual gate on institutional distribution. Issuers get disclosure obligations that scale rather than a binary registered-or-illegal choice. And developers who never take custody get a safe harbour confirming they are not money transmitters, folded in from the Blockchain Regulatory Certainty Act.

What it does not do is make any token a good investment. A clean classification says the venue is legal. It says nothing about whether the protocol earns anything.

Common questions

Is the CLARITY Act law?: No. It passed the House 294-134 on July 17 2025 and cleared the Senate Banking Committee 15-9 on May 14 2026. It sits on the Senate Legislative Calendar as Calendar No. 423 with no floor vote scheduled and no cloture motion filed.
Was the CLARITY Act the first crypto market structure bill to pass a chamber of Congress?: No, and this is widely misreported. FIT21, H.R. 4763, passed the House 279-136 on May 22 2024 in the 118th Congress using the same SEC and CFTC split. It then died in the Senate. The CLARITY Act is the furthest such a bill has advanced, because it has also cleared a Senate committee.
What is the difference between the CLARITY Act and the GENIUS Act?: The GENIUS Act governs stablecoin issuance, reserves, and redemption. The CLARITY Act governs everything else, meaning which regulator oversees trading, custody, and disclosure for non-stablecoin digital assets. They are separate bills solving separate problems.
Who wrote the CLARITY Act?: Rep. French Hill (R-AR), chairman of the House Financial Services Committee, introduced H.R. 3633 on May 29 2025. The Senate rewrite has been led by Senator Tim Scott, Senator Cynthia Lummis, and Senator Bernie Moreno.
Does the CLARITY Act protect self-custody and DeFi?: Only partly. The merged text confirms that non-custodial developers are not money transmitters, which is a real protection for people writing code. Self-hosted wallets appear in the Senate text as one item among the considerations Treasury must weigh in an illicit-finance strategy, alongside fraud, cybersecurity and identity-verification risk. That is an acknowledgement, not the affirmative safe harbour self-custody advocates asked for.

Sources

Research and analysis. Not investment or legal advice.

See the 251-token scorecard