The CLARITY Act in 2026: status and what it means for AML

The Senate fell 11 votes short on 15 September 2026. Moving to the bill needed three fifths of the chamber, 60 votes, and Senate roll call vote 234 in the Congressional Record shows 49 yeas, 50 nays and one senator not voting. The Senate never took up the bill itself. Every duty below is therefore a proposal, and the text the House passed and the Senate committee text still differ. Among the 24 markets in the comparison of cryptocurrency regulations by country, the United States has a federal stablecoin statute and no market structure statute.

What is the CLARITY Act?

The CLARITY Act is H.R. 3633, the Digital Asset Market Clarity Act. It splits oversight of crypto markets between the Securities and Exchange Commission and the Commodity Futures Trading Commission. The long title of the Senate reported text of 1 June 2026 calls it "a system of regulation of the offer and sale of digital commodities" by those two agencies.

Tokens are sorted by where their value comes from. In the House text passed on 17 July 2025, a digital commodity is a digital asset "intrinsically linked to a blockchain system", valued for the use of that system. The CFTC gets exclusive jurisdiction over trading in it, spot markets included. The Senate Banking Committee added a category on the SEC side, the ancillary asset: a network token whose value depends on "the entrepreneurial or managerial efforts" of its originator or a related person.

Picture a startup selling a token to fund a network its developers are still building, with the price resting on that team's work. The Senate text would call it an ancillary asset. A token valued for using a working chain fits the House definition of a digital commodity instead.

Where does the CLARITY Act stand in November 2026?

The motion to reconsider is the last action in the record of H.R. 3633 on congress.gov. The bill's record shows no vote on that motion and no new cloture motion as of 12 November 2026. It keeps its place on the Senate calendar as No. 423.

Senators would have voted on a newer text. A release from Senator Lummis's office on 14 September 2026 presented a final draft with 126 substantive changes, to be offered as a substitute only if cloture passed. It was never offered. Set against the committee text, that draft renumbers the illicit finance sections (201 becomes 10201, 205 becomes 10205, 305 becomes 10305). The $500, 72 hour and $3,500 kiosk figures, the 30 plus 150 day hold and the 360 day start stay the same.

The 119th Congress also runs out of time at noon on 3 January 2027. That is the date the Twentieth Amendment sets for the end of the House term elected in November 2024, and Senate Rule XVIII carries unfinished business over between sessions of the same Congress.

What AML and sanctions duties would the CLARITY Act add?

Section 201 does most of the work. As reported in the Senate on 1 June 2026, it adds digital commodity brokers and dealers to the financial institutions the Bank Secrecy Act covers. So does any registered digital commodity exchange that permits direct customer access. FinCEN, consulting the CFTC, would write their rules on the model of futures commission merchants, tailored to each firm's size and complexity.

The program would have five parts: a risk assessment, internal policies, procedures and controls, a designated compliance officer, ongoing employee training, and an independent audit function. Each firm would also retain transaction records and run a customer identification program with customer due diligence. It would monitor for and file suspicious activity reports, a duty that "may include use of appropriate distributed ledger analytics". Section 201(b)(2) then requires compliance with every sanctions law OFAC administers.

Section 302 of the same bill shows what such analytics look like, listing "distributed ledger-analytics screening measures" that identify wallet addresses owned by sanctioned persons. In its AML solution for crypto firms, complead, formerly Sanction Scanner, screens sanctions lists, wallets and names on one engine.

Picture a registered exchange that lets retail customers trade directly. Once FinCEN's rules applied, it would need that program, file SARs with FinCEN and answer for OFAC compliance. Section 906 sets when. A provision that needs a rulemaking starts 360 days after enactment or 60 days after its final rule appears in the Federal Register, whichever comes later.

Section 202 asks Treasury, with the federal functional regulators, to set examination standards, scaled to risk, for AML compliance in the digital asset sector. Section 203 creates a pilot. Within 90 days of enactment, FinCEN and Treasury would designate 10 money services businesses, 10 digital commodity firms and 10 banks, each one a volunteer, to share illicit finance information with agencies.

What would change for crypto ATMs and kiosks?

Picture a first time customer who returns to a kiosk on day 3 and sends $2,000 of bitcoin to a wallet. Section 205 still treats them as new. The term covers the 14 days from the first kiosk transaction. At $500 or more, the operator must first get the customer's confirmation that they wish to proceed and are not being fraudulently induced. The coins go to a specific wallet address. They cannot leave until 72 hours after the customer started the transaction. And until Treasury sets limits by regulation, a new customer cannot move more than $3,500 in any 24 hours.

Section 205 also adds kiosk operators to the federal registration requirement for money transmitting businesses, and operators would send Treasury every kiosk's address within 90 days and every 90 days after that. They would use distributed ledger analytics to stop coins going to a wallet known to be tied to fraud, let only one customer use each wallet address, and employ a full time compliance officer who is not the chief executive. A customer who was fraudulently induced gets the transaction fees refunded within 30 days if the customer files a complaint with the operator that includes a copy of a report made to a state or local law enforcement or government agency within 30 days of the transaction.

Kiosks already sit inside federal AML law. Under FinCEN's convertible virtual currency guidance of May 2019, an owner operator of a kiosk that takes cash and sends crypto is a money transmitter today. For AML in crypto, the kiosk also matters as a placement channel, the point where cash first turns into coins.

What else would the CLARITY Act do about illicit finance?

Three more AML provisions sit in Title III of the Senate text, the decentralized finance title.

Could a firm hold a transaction at law enforcement's request?

Section 305 would allow it. A stablecoin issuer or a digital asset service provider could delay a transaction, conversion or withdrawal for up to 30 calendar days, and a qualified written request from a state or federal law enforcement agency adds up to 150 more. A firm that holds in good faith is protected from private lawsuits if it meets the section's conditions. It must try to tell the customer, unless that would impede law enforcement, and it notifies law enforcement or the FTC unless an agency asked for the hold. It keeps the basis for each hold for three years. Picture a request that names a scam wallet: the provider pauses its withdrawals.

What special measure would cover digital asset transfers?

Section 303 adds a sixth special measure. Where Treasury finds a foreign jurisdiction, institution or class of transactions "of primary money laundering concern" for illicit finance through digital assets, it could prohibit or condition transmittals of funds by domestic financial institutions. FinCEN, for its part, dropped its own proposed special measure on convertible virtual currency mixing in a withdrawal announced on 5 October 2026.

Does the CLARITY Act apply to DeFi protocols?

In part. Section 301 orders rules for whoever controls a trading protocol that is not truly decentralized, for example one where a person or group can change its rules or block its users. Where that controller falls under the Securities Exchange Act, existing securities and Bank Secrecy Act requirements apply. Section 302 asks Treasury for guidance, within 360 days of enactment, on the sanctions and AML duties of distributed ledger messaging systems owned or run by a US person. A website that lets a user submit a swap to a protocol is one.

How does the CLARITY Act differ from the GENIUS Act?

GENIUS is law and covers stablecoin issuers. CLARITY is a bill about the markets around them. Approved on 18 July 2025 as Public Law 119-27, the GENIUS Act says a permitted payment stablecoin issuer "shall be treated as a financial institution for purposes of the Bank Secrecy Act", with an AML program that includes risk assessments and an officer to supervise it. CLARITY's section 201 would give brokers, dealers and exchanges that same status. Picture an exchange listing an issuer's coin. The exchange would answer under CLARITY, the issuer under GENIUS.

GENIUS takes effect on 18 January 2027, 18 months after enactment. The OCC's final rule of 23 October 2026 carries the same date.

Stablecoin yield, section 404

Section 404 bars a digital asset service provider and its affiliates from paying US customers interest or yield "solely in connection with the holding of the payment stablecoins". Rewards tied to bona fide activity or transactions stay allowed, under rules the section calls for. A yearly rate on an idle balance would be barred. A reward per payment could qualify.

What applies to crypto firms while the bill waits?

Nothing in the bill binds a firm until 360 days after it becomes law. These rules bind today:

• Money transmitter status. FinCEN's 2019 guidance treats exchangers, administrators and kiosk operators as money transmitters. They register with FinCEN and run the program, records, monitoring and SAR and CTR filing of the US AML framework.
• The travel rule at $3,000. FinCEN and the Federal Reserve announced on 6 November 2026 that they were withdrawing the 2020 threshold proposal. The travel rule stays at $3,000, not $250, for transfers that begin or end outside the United States.
• No unhosted wallet rule. FinCEN withdrew its proposed recordkeeping, verification and reporting rule for unhosted wallet transactions on 5 October 2026.
• CFTC rulemaking. The CFTC's advance notice on crypto asset markets takes comments until 14 December 2026, a step toward rules under section 2(c)(2)(D) of the Commodity Exchange Act.
• SEC custody proposal. The SEC's crypto custody proposal for advisers and funds takes comments until 7 December 2026.
• State licenses. New York has required a BitLicense under 23 NYCRR Part 200 since 24 June 2015, and a BitLicense applicant must apply separately for a money transmission license, according to the New York Department of Financial Services.

2026 dates for the CLARITY Act and the agencies

• 14 May. The Senate Banking Committee ordered the bill reported, 15 to 9.
• 1 June. The committee reported its substitute text, and the bill went on the calendar as No. 423.
• 14 September. The sponsors released a final draft with 126 changes. It was never offered.
• 15 September. Cloture on the motion to proceed failed, 49 to 50.
• 29 September. The Federal Reserve proposed its GENIUS Act rules, with comments due by 30 November.
• 5 October. The CFTC published its advance notice, and FinCEN withdrew its unhosted wallet and mixing proposals.
• 6 November. FinCEN and the Federal Reserve announced the withdrawal of the travel rule threshold proposal, so $3,000 stays.

The open question is timing. A crypto firm can build the section 201 program and the kiosk controls now, on FinCEN's money transmitter rules, or wait for a text that may change again. A crypto money transmitter already registers and keeps an AML program, records, monitoring and SAR and CTR filing under FinCEN's 2019 guidance. Much of section 201 is work such a firm runs today.