Senate Republicans released a new draft of the CLARITY Act on July 22, 2026 — the bill meant to finally give US crypto markets a clear regulator and a clear rulebook — and within a day, seven Democratic senators had already said it wasn’t good enough. The dispute isn’t really about whether crypto needs a market-structure law anymore. Both parties largely agree it does. It’s about who gets to profit from crypto while writing the rules that govern it.
The bill, formally the Digital Asset Market Clarity Act, has been moving through Congress for over a year. The House passed its version 294 to 134 back in July 2025, after Financial Services Committee Chairman French Hill introduced it that May. The Senate has spent the time since trying to merge separate work from the Banking Committee, led by Chairman Tim Scott and digital-assets subcommittee chair Cynthia Lummis, and the Agriculture Committee, chaired by John Boozman — a structural quirk of US financial regulation, where digital assets that look like commodities fall under the CFTC’s jurisdiction (and therefore Agriculture Committee oversight) while assets that look like securities fall under the SEC and Banking Committee. Untangling which crypto assets belong in which bucket is the actual technical core of the bill, and it’s the part both parties broadly agree on.
What blew up this specific draft is an ethics provision. The new text would bar the president, vice president, members of Congress, federal judges, and senior officials — along with their spouses — from issuing or sponsoring a digital asset “in exchange for consideration” while in office, with the Department of Justice enforcing violations. Republican Senator Bernie Moreno called it “the most powerful ethics language in U.S. history.” The catch, according to the seven Democratic senators who came out against the draft — Angela Alsobrooks, Cory Booker, Catherine Cortez Masto, Ruben Gallego, John Hickenlooper, Mark Warner, and Raphael Warnock — is that the rule sunsets in 2029 and only needs to be implemented within a year of the bill becoming law, giving it a built-in expiration date that conveniently outlasts the current administration’s term. Their joint statement said the bill “as it currently stands falls short,” citing gaps not just in ethics enforcement but in consumer protection, illicit-finance safeguards, conflict-of-interest rules, and market-integrity standards more broadly.
That objection matters procedurally because the bill needs 60 votes to clear the Senate, and Republicans don’t have that on their own — meaning roughly 10 Democratic votes are required, and of the seven senators who spoke out, only Alsobrooks and Gallego had previously supported the bill in committee. Majority Leader John Thune’s office has signaled a floor vote could come “in the coming days,” but the Senate leaves for summer recess after August 7, and once senators shift focus to the midterms, the realistic window to pass anything closes fast. The rest of the bill’s substance — provisional registration procedures for exchanges, commodity pool operator rules, a regulatory pathway for tokenized securities and on-chain futures markets, and a preserved Blockchain Regulatory Certainty Act carve-out that keeps developers who never custody user funds from being classified as money transmitters — has drawn far less public objection than the ethics fight that’s now consuming the news cycle around it.
The irony is that the actual market-structure substance of CLARITY is close to what the crypto industry has spent years lobbying for: a defined split between SEC and CFTC jurisdiction, self-custody protections written into federal law, and a real registration pathway instead of the current patchwork of state licenses and enforcement-by-lawsuit that has defined US crypto regulation since 2022. That substance is now hostage to a fight over whether a sitting president should be allowed to profit from launching a token — a question that has very little to do with market structure and everything to do with the specific political moment the bill is trying to pass through.
What This Means for Philippine Founders
The CLARITY Act is a US law, but its central design question — which regulator has jurisdiction over which kind of crypto asset — is the exact question the Philippine SEC’s Crypto Asset Service Provider framework and BSP’s Virtual Asset Service Provider circulars are already wrestling with locally, just with fewer agencies involved. A Filipino founder building a token-issuance platform, an exchange, or a DeFi product with any ambition of reaching US users or US-based liquidity should watch which assets end up classified as commodities versus securities under the final US text, since that classification will heavily influence which US exchanges and market makers are legally able to list a given token at all. The preserved Blockchain Regulatory Certainty Act language is also worth tracking closely: if it survives into final law, it sets a real US precedent that non-custodial developers — the model most Web3 builders in the Philippines actually operate under — shouldn’t be treated as money transmitters, a distinction that matters enormously for how BSP eventually decides to draw the same line here.
Share this article