U.S. Senate advances CLARITY Act

The Senate Banking Committee voted 15-9 on May 14 to advance the Digital Asset Market Clarity Act of 2025, the latest congressional push to write federal rules for crypto trading, token sales and market oversight. Chairman Tim Scott, a South Carolina Republican, said the bill would set “clear rules of the road for digital assets” after nearly a year of negotiations with Democrats. Ranking Member Elizabeth Warren, a Massachusetts Democrat, opposed the measure and said it would put consumers, investors and the financial system at risk. The committee action is one step, not final passage. The bill now goes to the Senate floor after the panel’s markup in Washington, according to the Banking Committee. The measure builds on a broader congressional effort to divide oversight between the Securities and Exchange Commission and the Commodity Futures Trading Commission, while adding disclosure, trading and anti-manipulation rules for parts of the digital-asset market. ### What did the Senate panel actually approve? H.R. 3633, the Digital Asset Market Clarity Act of 2025, was the legislation before the committee at its May 14 executive session in Dirksen 538. The Banking Committee said the bill advanced in a bipartisan vote and now moves to the Senate floor. Scott said lawmakers had “worked through real differences” before the markup. (banking.senate.gov) The Banking Committee’s section-by-section says the measure would create disclosure requirements for some transactions involving “ancillary assets,” a term it uses for certain network tokens whose value depends on entrepreneurial or managerial efforts. The same summary says the bill would treat those tokens themselves as commodities in that framework and create an SEC exemption called “Regulation Crypto” for certain offerings tied to investment contracts. (banking.senate.gov) ### What rules would change for token issuers and insiders? Section 102 of the committee summary says issuers would face initial and semiannual disclosures for covered ancillary-asset transactions. The summary also says issuers or intermediaries could certify that managerial efforts have ended, which would end those SEC disclosure obligations if the certification is accepted. (banking.senate.gov) Section 103 says companies using the proposed exemption could raise the greater of $50 million per calendar year for four years or 10% of the total dollar value of outstanding ancillary assets, with a $200 million cap on gross proceeds under that exemption. Section 104 says related persons would face limits on how much of those assets they could resell over a 12-month period, a provision the committee summary says is aimed at reducing manipulation, insider trading and large insider sell-offs. (banking.senate.gov) ### Where does the CFTC fit into the Senate’s broader crypto plan? The Senate Agriculture Committee moved separate market-structure legislation earlier this year. Chairman John Boozman said on January 29 that his committee had advanced the Digital Commodity Intermediaries Act, which would give the CFTC new authority to regulate digital commodities and impose customer-fund segregation, conflict-of-interest safeguards and disclosure requirements. (banking.senate.gov) Boozman said that agriculture bill built on the House-passed CLARITY Act and incorporated provisions negotiated with Senate Democrats. That means the Senate’s crypto framework is moving through more than one committee, with Banking handling securities and market-structure questions and Agriculture handling CFTC spot-market authority. That division is an inference from the committee jurisdictions and the texts each panel released. (agriculture.senate.gov) ### Why are Democrats split on the bill? Elizabeth Warren used her opening remarks on May 14 to argue the committee was considering a bill “written by the crypto industry for the crypto industry.” Warren also said the panel had not held a public hearing on the bill despite requests from senators including Jack Reed, John Kennedy, Chris Van Hollen and Tina Smith. (agriculture.senate.gov) Tim Scott said the opposite in the committee majority’s statement, calling the measure a product of “good-faith bipartisan negotiations” and saying it included stronger safeguards and tools to stop bad actors. The 15-9 vote showed at least some Democratic support even as Warren led the opposition. (banking.senate.gov) ### What happens next in Congress? The Senate floor is the next formal stop after the May 14 committee vote, according to the Banking Committee. The committee has posted the bill text, a section-by-section summary and the markup notice on its website, where senators, lobbyists and market participants can track changes before any floor debate. (banking.senate.gov) John Boozman said in January that he would keep working with colleagues and stakeholders as the Senate moves forward on crypto market-structure legislation. Any final package would still have to clear the full Senate and be reconciled with House-passed legislation before it could go to the president. (agriculture.senate.gov) (banking.senate.gov)