Senate committee advances first comprehensive crypto regulation bill

The Senate Banking Committee voted 15-9 on May 14, 2026, to advance the Digital Asset Market Clarity Act (H.R. 3633) to the full Senate floor. Chairman Tim Scott called it a milestone after . The House had already passed the bill 294-134 in July 2025, making the Senate committee the last major procedural hurdle before a floor vote.

Democratic Sens. Ruben Gallego of Arizona and Angela Alsobrooks of Maryland joined all 13 Republicans to create the bipartisan margin. Both had over ethics language limiting officials' crypto involvement. Their yes votes came despite no final ethics deal, and both warned they'd vote no on the floor without one.

The Clarity Act divides digital assets into three categories: digital commodities, investment contract assets, and permitted payment stablecoins. The CFTC gets , including new registration requirements for digital commodity exchanges, dealers, and brokers. The SEC retains authority over primary market crypto transactions and investment contract assets.

This dual-regulator framework ends years of jurisdictional confusion. The SEC under former Chair Gary Gensler had treated most tokens as securities, while the crypto industry argued they were commodities. The bill draws that line through statute for the first time.

Scott opened the hearing by arguing that instead of clear rules. He framed the vote as ending a "regulatory gray zone" that had driven crypto companies overseas. Scott rejected several Democratic amendments he considered outside the bill's scope, but reversed course late in the markup to accept additional amendment votes, a move that .

The reversal came after hours of debate and procedural wrangling. By allowing more amendment votes, Scott gave the two Democrats enough procedural cover to vote yes while preserving their leverage on ethics for the floor.

Ranking Member Elizabeth Warren led the opposition, filing . She called the bill "not ready for prime time" and argued it would "blow a hole in our securities laws that have protected investors since 1929." Warren warned the legislation "declares open season on defrauding American consumers who use crypto."

Warren and Sen. Jack Reed also called on the Department of Justice and Treasury Department to investigate World Liberty Financial for alleged ties to sanctioned individuals. The committee rejected Warren's amendments to strip the bill's digital commodity framework.

The Trump family's crypto holdings cast a long shadow over the ethics debate. Bloomberg from World Liberty Financial token sales as of May 2026. Sen. Chris Van Hollen filed an amendment to from owning, promoting, or affiliating with digital asset businesses.

Republicans rejected the ethics language, arguing it fell outside the bill's scope and could be added via floor amendments. Sen. Kirsten Gillibrand said there'd be no Democratic support on the floor without an ethics provision. It's unclear what ethics language President Trump would accept in any final bill.

The bill includes anti-money laundering provisions that treat digital commodity exchanges, dealers, and brokers as financial institutions under the Bank Secrecy Act. They'd face requirements for . Treasury would publish sanctions and AML guidance for DeFi front-ends operated by U.S. entities.

Sen. Catherine Cortez Masto warned that DeFi liability protections could . The committee adopted a DeFi safe harbor amendment 18-6 after a technical revision, with Sens. Mark Warner, Cortez Masto, and Alsobrooks joining Republicans on the compromise.

A broad coalition opposed the bill before the vote. The AFL-CIO, Service Employees International Union, American Federation of Teachers, National Education Association, and AFSCME that legitimizing crypto could jeopardize financial stability and pension accounts. The banking industry argued the bill would let crypto firms offer interest-like payments to stablecoin holders, potentially and reducing capital available for loans.

Law enforcement groups also opposed the bill, arguing it didn't do enough to prevent illicit financial transactions through digital assets.

The bill now heads to a merger with the Senate Agriculture Committee's version, which . Sen. John Boozman chairs the Agriculture Committee, which has jurisdiction over the CFTC. Staff from both committees must reconcile the two bills into a single text before the full Senate can vote.

The merged bill needs 60 votes to overcome a 📖filibuster. The GENIUS Act stablecoin law , evidence that crypto legislation can win bipartisan floor support. But the Clarity Act's wider scope and unresolved ethics fight make the math harder.

Gallego made his conditional support explicit after the vote. "We've come close, but not finished, an agreement on ethics guardrails for elected officials," he said. "If this isn't resolved by the time of the floor vote, like I have in the past, ." Alsobrooks echoed the warning, saying her committee yes wouldn't translate to floor support without progress on outstanding issues.

Their leverage matters because Republicans hold 53 Senate seats. Even with all Republicans voting yes, leadership needs at least 7 Democrats to reach 60. Gallego's and Alsobrooks's public conditions signal to other Democrats what the price of their votes will be.

The Clarity Act changes Washington's crypto posture. Under the Biden administration, the SEC pursued an enforcement-first approach, filing lawsuits against major exchanges like Coinbase and Binance. The Trump administration reversed course, with the SEC and the White House pushing Congress to pass 📖market structure legislation.

The crypto industry spent heavily to elect friendly lawmakers in 2024. Political action committees tied to crypto firms spent over $130 million on congressional races. The bill moved from a House vote to a Senate committee in under a year after that spending helped elect industry-friendly lawmakers.