Congress Advances CLARITY Act, Giving CFTC New Power Over Digital Commodities

Congress advanced the Digital Asset Market Clarity Act, also known as the CLARITY Act or H.R. 3633, which would give the Commodity Futures Trading Commission new power over digital commodities and shift spot-market supervision to the CFTC.

“Clarity Act Risks Regulation Without Oversight, Brookings Fellow Says As Congress weighs crypto legislation, Aaron Klein says the CFTC needs more resources, independence and coordination to oversee digital markets”

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Reuters’ account of the bill’s timeline says the legislation cleared the House in July 2025 and that the Senate Banking Committee advanced the measure on May 14, 2026 after bipartisan negotiations over digital asset market rules.

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The MEXC Exchange report says the CFTC would receive exclusive authority over spot transactions involving digital commodities, and that crypto exchanges, brokers, dealers, and custodians handling those assets would have to register with the agency.

It also says the bill gives regulators 360 days to complete rulemaking and sets a 270-day effective date for registration requirements.

Brookings fellow Tonantzin Carmona warned that the CLARITY Act could create a large regulatory system without giving its main watchdog enough resources, and she pointed to the CFTC’s FY2026 enacted budget of approximately $365 million and its later request for $410 million and 650 full-time equivalent staff for FY2027.

Aaron Klein, speaking through CoinDesk’s Policy Protocol, argued that the CFTC “was not built for the scale of responsibilities envisioned under current crypto legislation.”

CoinDesk’s framing of the debate says Klein warned that giving the agency new powers without additional staff, funding and expertise could create the appearance of regulation without meaningful oversight.

Crypto Briefing

Crypto Briefing similarly ties the scrutiny to staffing, saying the CFTC is facing renewed questions over whether it can police digital asset markets as Congress weighs the CLARITY Act.

In that account, Klein said the debate is becoming “a debate over regulatory capacity,” and he warned that fragmented oversight can create delays and confusion by repeating past regulatory failures if agencies lack the resources or will to enforce rules.

Crypto Briefing also reports Klein’s concern about independence, saying enforcement decisions should not be influenced by political relationships and that closer coordination between U.S. market regulators is needed even as he expressed skepticism that Congress would merge the agencies.

Decryption’s account of the stakes says supporters argue the Clarity Act would make the U.S. the global leader in crypto regulation and influence policy abroad, while critics warn it could weaken anti-money laundering standards worldwide.

“CFTC faces oversight questions as CLARITY Act expands crypto mandate Critics warn that handing the CFTC sweeping new crypto responsibilities while its staff shrinks 21% is a recipe for regulation without enforcement”

Crypto Briefing

Kristin Smith, president of the Solana Policy Institute, told Decrypt that “The rest of the world is watching Washington right now,” linking the bill’s potential reach to how other jurisdictions responded after President Donald Trump signed the stablecoin-focused GENIUS Act into law last summer.

Decrypt reports that Sen. Elizabeth Warren warned that “If we water down global illicit finance standards, we’ll open the door to more cross-border sanctions evasion, money laundering, and terrorist financing,” and she said Congress has a responsibility to set a high standard for other countries to follow.

The MEXC Exchange report adds that under the CLARITY Act the CFTC would have exclusive authority over spot transactions involving digital commodities and that the bill would reduce the SEC’s role in many crypto markets while giving the smaller commodities regulator a new mandate.

It also says the bill would treat many crypto assets as digital commodities, placing them outside the SEC’s main trading oversight once they meet the bill’s conditions, and that classification would affect assets such as Bitcoin, Ether, Solana, and XRP if regulators apply the proposed taxonomy in final rules.