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The CLARITY Act passed the House of Represenatives, but now faces debate and market backlash as it is set to enter the Senate floor. Changing attitudes could affect policy as the market has some concerns.
Jan 27, 2026
Washington’s latest and largest attempt to define the crypto market is hitting a snag.
The Digital Asset Market Clarity Act of 2025 (CLARITY Act) was created to define how digital assets are viewed and handled by US regulators, in particular what falls under SEC versus CTCF’s responsibilities. While the bill passed the House of Representatives in 2025, The Senate has yet to come to a conclusion, after a scheduled Senate Banking Committee meeting was postponed in the wake of backlash from crypto industry players, including Coinbase, who withdrew support for the Senate’s Draft.
As of now, the CLARITY act has not officially reached the Senate floor. Right now, it is in the committee stage, the Senate Banking Committee was set to convene for markup, debating amendments and changes to the bill. The markup on the crypto legislation was delayed after industry pushback came from changes surrounding stablecoin rewards, tokenized equities, and how compliance affects DeFi-related activities.
The CLARITY Act was introduced to establish “a regulatory framework for digital commodities, defined by the bill as digital assets that rely upon a blockchain for their value”, which includes cryptocurrency and other crypto assets. Importantly, it also attempts to put clear boundaries of responsibility between the Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC) when it comes to regulating exchanges, brokers, and dealers. The House version of the bill passed on July 17, 2025, and then moved to the Senate Committee on Banking, Housing, and Urban Affairs.
As Congress summarizes it, the bill is defining at what point a blockchain is considered “mature”, practices for monitoring transactions, limits on customer assets, and some exemptions.
Notably, the bill is placing oversight with the CFTC for digital commodity transactions and derivatives (futures, swaps, etc) based on digital assets, with management on preventive fraud and manipulation measures. Meanwhile, the SEC would maintain authority over securities offerings and sales (like raising capital) with disclosure rules to protect investors. The bill would apply current securities laws under the Howey Test for "investment contracts”. It would however, exempt certain digital commodities from SEC registration if certain conditions are met, mainly based on blockchain maturation and sales thresholds.
Congress’ summary also points out that any intermediaries dealing with digital assets would be subject to Bank Secrecy Act (BSA) obligations for purposes of AML compliance.
Last week the Committee’s Republicans explained their approach being rooted in protection for “Everyday Americans”, with “Regulatory Clarity for the Crypto Industry”. Their aim is also purported to “take a hardline approach to illicit finance while preserving innovation and civil liberties”
The crypto market isn’t reacting to just delays. Senators are now rewriting and substituting elements of the bill that has caused controversy for crypto related businesses, particularly ones that want clarity without their bottom line being cut.
This controversy hit a boiling point when Coinbase CEO Brian Armstrong publicly withdrew support from the bill, claiming that the current draft would leave the crypto market in a worse state than it currently is in. Once the statement hit headlines, the Senate Banking Committee ended up postponing the planned markup. Despite this, Armstrong remains bullish on the US government's support for crypto legislation after speaking at the World Economic Forum.
A big point of contention surrounding the bill comes from stablecoin rewards— yield-like benefits for holding stablecoins or using them in certain ways. Some lawmakers and financial institutions argue that if sablecoins pay or simulate interest, deposits could move away from traditional banking. Crypto forward platforms argue that limits on rewards would hinder innovation and prevent competition.
Section 404 of the amended bill would specifically stop digital asset providers from offering interest or yield that is “solely in connection with the holding of a payment stablecoin.”
SkyBridge Capital Founder Anthony Scaramucci argued “The whole system is broken: The Banks do not want the competition from the stable coin issuers so they're blocking the yield”, mirroring similar concerns that Brian Armstrong mentioned regarding the industry and broader competition.
This is not just a debate for crypto-insiders. Stablecoins are the dominant cryptocurrency for every day crypto flows, and any US rule that affects incentives can have implications for liquidity and consumer behaviors.
Outside of stablecoins, there's two other areas of argument around the bill.
The Senate’s amendments could restrict or undermine tokenized stock products
Compliance between DeFi activities and centralized intermediaries is still being considered in regard to how many obligations will actually be in play.
These concerns come from the implications of the CLARITY Act’s current wording and coverage. These are not lightly worded passages, they are market changing regulations that could affect how crypto is viewed, handled, and traded.
Market trades are based on probabilities. When bipartisan bills come into the picture, investors see it as reducing long term risk, since market makers, intermediaries, and financial institutions have clearer expectations for compliance.
When bills get delayed, traders start pricing based on
Longer uncertainty windows
Odds of watered down bills
Odds the bill falls completely in spite of potential votes.
Coinbase CEO’s comments on the bill’s delays and the pullback in crypto prices illustrated how sensitive the market can be.
US exchanges and brokers will have clearer regulatory lines and registration pathways
Financial Institutions who want compliance standards to be the norm.
Consumers, assuming disclosures and protections are strengthened in their favor without killing legitimate access to the market.
Stablecoin and Issuers who rely on rewards or yield mechanics
Tokenized equity platforms if new definitions and limitations stop their business model.
DeFi businesses if “control points” are defined broadly to the point of creating overbearing compliance
The Clarity ACT is not iGaming Legislation, but it could have implications for online casino operators and the broader iGaming market indirectly through payments and liquidity
If stablecoin rewards are restricted, some users could be less inclined to hold on to stablecoins long term, which in turn could affect deposit behavior and on-chain liquidity.
If centralized intermediaries have more expectations for AML compliance, fiat on ramps and compliant stablecoins could become more standardized, creating higher expectations for KYC/AML compliance for operators who have US users or US regulated parties.
These are indirect, potential effects, but matter for iGaming operators since stablecoin is the current dominant bridge between traditional finance and offshore gaming activity.
Developments are still ongoing. No one is sure what the final word will be when the Senate finishes markups, but Crypto Casino will be monitoring the situation as it evolves.
