Key facts
- Senator Tim Scott accused Democrats of obstructing the CLARITY Act, a bill designed to define SEC and CFTC jurisdiction over digital assets.
- The CLARITY Act would place most digital commodities under CFTC oversight and set registration rules for exchanges and brokers.
- The House passed its version of the bill in July 2025, and the Senate Banking Committee advanced its version in May 2026.
- Sticking points remain on ethics provisions and stablecoin yield rules in the merged text.
- Democrats, led by Senator Elizabeth Warren, have raised concerns about investor protections and national security gaps.
- A cloture vote on the motion to proceed in the Senate is scheduled for September 15, 2026.
Senate Banking Committee Chairman Tim Scott has accused Democrats of deliberately stalling the CLARITY Act, a significant legislative effort to define the jurisdictional boundaries between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) concerning digital assets. Speaking at the SALT Conference, Scott asserted that elements within the Democratic party, specifically referencing Senator Elizabeth Warren's team, aim to drive cryptocurrency businesses out of the United States, hindering American competitiveness in the financial sector.
The CLARITY Act, which has seen progress with House passage in July 2025 and Senate Banking Committee approval in May 2026, aims to establish clear regulatory frameworks for digital assets, including registration requirements for exchanges and brokers, while providing safe harbors for developers. However, a merged ~600-page text faces remaining disagreements on ethics provisions and stablecoin yield rules. Despite efforts, including a White House-convened crypto summit, a partisan gap persists, with Democrats citing insufficient investor protections and national security concerns.
Industry leaders and some moderate Democrats are urging for swift action, warning that the U.S. risks falling behind global competitors in establishing clear crypto regulations. Market sentiment reflects this uncertainty, with Galaxy Research reducing its passage odds for the CLARITY Act to 10%. Analysts suggest that in the absence of legislative clarity, the SEC and CFTC may resort to agency rulemaking, which could be subject to reversal by future administrations. The legislative uncertainty has already impacted market participants, with Circle's stock experiencing a decline following a downgrade linked to the stalled bill. The upcoming cloture vote in the Senate on September 15, 2026, is seen as a critical juncture for the future of U.S. crypto regulation.