Sen. Cynthia Lummis advances CLARITY Act to expand Treasury sanctions powers and enable crypto firms to freeze suspicious transactions.
Regulation & Gov ·
Senator Cynthia Lummis has advanced the CLARITY Act, proposing expanded Treasury sanctions authority alongside a mechanism that would allow cryptocurrency firms to halt suspicious transactions before illicit funds can be transferred. The bill is part of a broader legislative effort to establish a comprehensive market-structure framework for digital assets after more than a decade of regulation shaped primarily through enforcement actions and agency guidance rather than statutory law.
The CLARITY Act addresses what sponsors describe as a fragmented regulatory environment, with the Securities and Exchange Commission and Commodity Futures Trading Commission asserting overlapping jurisdiction while states impose separate requirements. The framework seeks to classify tokens by function—as securities, commodities, or stablecoins—and assign regulatory responsibility accordingly, with the stated aim of ending ad-hoc enforcement-based regulation while balancing consumer protection against industry innovation.
The Senate is developing its own version of the bill, with the Banking Committee having advanced substitute text in May 2026. The measure faces a crowded legislative calendar and mixed industry support; Galaxy Research has assessed passage odds at 50-50 for 2026, while the White House has signaled it will consult with law enforcement groups regarding the illicit-finance provisions as the process continues.