Senate Banking Committee Advances Revised CLARITY Act Draft Toward Markup in 2026

The Senate Banking Committee is moving a revised draft of the CLARITY Act — the most significant pending US federal crypto market structure legislation — toward committee markup. The development, reported on May 12, 2026, signals that Congress is closer than ever to establishing a comprehensive legal framework for digital asset classification and regulatory jurisdiction in the United States.

Key Takeaways

• The Senate Banking Committee is advancing a revised version of the CLARITY Act toward markup — the formal process of amending and voting on a bill in committee.
• The revised draft would fundamentally realign SEC and CFTC jurisdiction over digital assets, establishing clearer lines for which agency regulates what.
• Lawmakers are debating ethics provisions targeting conflicts of interest involving public officials who hold cryptocurrency — a likely condition for the bipartisan support needed to advance the bill.
• If enacted, the legislation would reshape compliance obligations for every US crypto exchange, issuer, and broker-dealer.

What Happened?

The Senate Banking Committee is preparing to mark up a revised draft of the CLARITY Act (originally introduced to Clarify the Law Around the Regulation of Digital Assets). The bill represents Congress’s most advanced attempt to resolve the longstanding jurisdictional uncertainty between the SEC and CFTC — an ambiguity that has driven enforcement-by-litigation for years. The revised draft reportedly includes new ethics provisions addressing conflicts of interest when elected officials and senior government appointees hold digital asset positions, a flashpoint that could determine whether the bill secures the bipartisan votes needed to clear committee and reach the Senate floor.

Who Is Affected?

The impact is sweeping across the US digital asset industry:

• Crypto exchanges and trading platforms — would face a restructured registration and compliance regime depending on whether listed assets fall under SEC or CFTC oversight.
• Token issuers and project founders — would gain a statutory framework for token classification, potentially replacing the current case-by-case Howey test analysis (SEC v. W.J. Howey Co., 328 U.S. 293 (1946)) with legislatively defined categories.
• Broker-dealers and custodians — would need to align operations with new statutory definitions and registration requirements.
• Compliance officers and in-house counsel — must prepare for a potential overhaul of current compliance frameworks if the bill advances.

What Does This Mean Legally?

The CLARITY Act would provide what the US crypto industry has lacked since Bitcoin’s inception: a statutory market structure framework. Currently, the SEC and CFTC assert overlapping and sometimes contradictory jurisdiction, with the SEC treating most tokens as securities under the Howey test and the CFTC claiming jurisdiction over digital commodities under the Commodity Exchange Act (7 U.S.C. § 1 et seq.). The revised bill would draw statutory lines between digital asset securities and digital commodities, establish a token classification or “graduation” pathway, and define registration obligations accordingly.

The ethics provisions add a politically significant dimension. Congressional debate over whether public officials should be permitted to hold crypto assets while shaping crypto policy could either accelerate or stall the bill’s progress depending on the compromise reached.

What to Do Now

• Monitor the markup. Track the Senate Banking Committee’s schedule for the formal markup session — this is when amendments will be offered and the bill’s final committee language will be set.
• Review current compliance posture. If you operate an exchange, broker-dealer, or token project in the US, begin mapping your current registrations and compliance programs against the CLARITY Act’s proposed framework.
• Engage counsel. This is the time for industry participants to consult with securities and regulatory attorneys about how the proposed SEC/CFTC jurisdictional split would affect their specific operations.
• Watch for the ethics compromise. The outcome of the ethics provision debate will signal whether the bill can secure bipartisan passage — a critical indicator of whether this legislation has real momentum or faces further delays.

CryptoLaw.blog will publish a detailed regulatory analysis once the markup text is publicly available. Subscribe for updates.

This article is for informational and educational purposes only and does not constitute legal advice. Reading this content does not create an attorney-client relationship. Laws and regulations in the cryptocurrency space change rapidly — consult a qualified attorney for advice specific to your situation and jurisdiction. Seth Goettelman is licensed to practice law in Wisconsin and Florida.