Bipartisan CLARITY Act Advances to Senate, Reshaping US Crypto Regulation

A new law aimed at regulating digital assets has moved forward in Congress. The CLARITY Act, passed by the House in July 2025 with bipartisan backing, now faces Senate review. It introduces stricter rules for tax reporting, regulatory oversight, and consumer protections in the crypto industry. The act expands tax reporting requirements by mandating more detailed disclosures from brokers. These changes will be filed through Form 1099-DA, ensuring the IRS receives broader transaction data.

Regulatory authority over digital assets will now be split between the SEC and the CFTC. Classification will depend on factors like decentralisation, control, and network structure. Assets meeting the *mature blockchain test* may eventually shift from SEC oversight to CFTC jurisdiction. Centralised exchanges and intermediaries must register with the CFTC under the new rules. This registration brings customer protection measures, including transparency and reporting standards similar to traditional finance. The act also includes the *Blockchain Regulatory Certainty Act*, which shields non-custodial developers from certain legal risks if they operate within decentralised protocols. Senator Cynthia Lummis played a key role in drafting the bill’s language and securing cross-party support. Meanwhile, Senate negotiators are still examining provisions related to stablecoins before finalising the legislation.

If approved, the CLARITY Act will reshape how digital assets are taxed, traded, and regulated in the US. Exchanges and developers will face new compliance demands, while regulators gain clearer authority over different types of crypto assets. The Senate’s ongoing discussions will determine the final scope of the law.