The CLARITY Act Is Advancing: What Compliance Teams Should Be Watching
As digital asset regulation moves closer to reality, firms may need to prepare for significant compliance and operational changes.
On May 14, 2026, the Senate Banking Committee voted 15-9 to advance the Digital Asset Market Clarity Act — the most significant US crypto market structure legislation to gain Senate traction to date. For compliance professionals, this is more than a legislative milestone; it is an early warning sign that the regulatory environment for digital assets is beginning to take shape.
While enforceable rules are still likely years away, the operational decisions firms will need to make around registration, employee compliance, personal account dealing (PAD), surveillance, and governance cannot wait until the final rulebook arrives. Building and implementing those frameworks could take 12 to 18 months, meaning firms that delay preparation may scramble to catch up once regulatory expectations solidify.
The CLARITY Act Explained
At its core, the CLARITY Act is designed to establish a formal regulatory framework for digital assets in the United States by clearly defining which federal agencies oversee different types of crypto-related products and activities.
For years, one of the biggest challenges facing the digital asset industry has been regulatory uncertainty, particularly around whether certain tokens should be treated as securities, commodities, or payment instruments. The CLARITY Act attempts to resolve that ambiguity by creating defined categories of digital assets and assigning oversight responsibilities accordingly.
Under the proposed framework:
- Digital commodities tied to decentralized blockchain networks would fall primarily under Commodity Futures Trading Commission (CFTC) oversight.
- Tokens representing securities-like characteristics, such as equity, debt, or investment interests, would remain under Securities and Exchange Commission (SEC) jurisdiction.
- Payment stablecoins would fall under banking regulator supervision, with certain anti-fraud and market oversight responsibilities shared between the SEC and CFTC.
The legislation also introduces requirements for greater coordination between regulators, including joint SEC-CFTC rulemaking efforts, guidance around anti-money laundering obligations in decentralized finance (DeFi), and new rules designed to address cross-platform trading and risk management.
In practical terms, the CLARITY Act is intended to create a more structured and predictable regulatory environment for digital asset markets, while also expanding compliance, governance, and oversight expectations for firms operating within them.
Key Dates in the Regulatory Rollout
- Done: Senate Banking Committee 15-9 vote, May 14, 2026.
- Next: Merge Banking Committee and Agriculture Committee (DCIA) bills into a unified Senate text.
- Senate floor: 60-vote threshold required; ethics provision must be resolved first. Target before the August 2026 recess.
- House reconciliation: Senate bill must reconcile with the House-passed version (294-134, July 2025).
- Signing: White House targets July 4; more realistic scenario is fall 2026.
- Compliance deadlines: CFTC registration opens 180 days after enactment; firms must register within 90 days. Most rules effective 360 days after enactment, landing in 2027-2028.
Fraud, Manipulation, and Insider Risk: What Firms Need to Understand
One of the most important implications of the CLARITY Act is how it changes regulatory oversight for digital commodities and what that means for compliance programs.
Under the proposed legislation, digital commodities would largely fall under the jurisdiction of the Commodity Futures Trading Commission (CFTC), giving the agency primary responsibility for investigating fraud, market manipulation, and deceptive conduct involving these assets.
However, compliance teams should not assume this automatically creates the same type of insider trading framework that exists under traditional securities laws.
The bill introduces certain restrictions on project insiders, including limits on when affiliated individuals can sell digital assets before a blockchain project reaches a defined level of maturity. But these provisions are narrower than the insider trading prohibitions commonly associated with SEC-regulated securities markets.
Importantly, the Commodity Exchange Act historically has not included a standalone insider trading rule equivalent to SEC Rule 10b-5, and the CLARITY Act does not fully close that gap.
For compliance teams, this creates several important considerations:
- Employees may still gain access to material nonpublic information tied to digital commodity projects
- Existing PAD and employee trading policies may not fully address digital commodity risk
- Surveillance and restricted list frameworks may require expansion beyond traditional securities oversight
- Firms may need stronger monitoring around token issuances, governance decisions, partnerships, and project-related activity
- Compliance frameworks may need to evolve even before final rules are fully defined
In practice, firms should begin evaluating whether current employee compliance, surveillance, and insider risk controls are sufficient for an increasingly complex digital asset environment.
NFA Oversight and the Expanding Compliance Framework
The CLARITY Act would significantly expand the regulatory infrastructure surrounding digital commodity markets, bringing new registration, supervision, and oversight expectations for firms operating in the space.
Under the proposed framework, digital commodity exchanges, brokers, and dealers would need to register with both the CFTC and the National Futures Association (NFA). That means firms could face:
- NFA proficiency and background requirements for associated persons
- Ongoing examinations and supervisory reviews
- Expanded compliance and recordkeeping obligations
- NFA disciplinary oversight
The legislation also builds on the existing “core principles” model used for traditional designated contract markets (DCMs), extending those expectations into digital asset markets. This would require firms to strengthen areas such as:
- Market surveillance
- Conflicts management
- System safeguards
- Token listing standards and disclosures
- Operational resilience and governance
At the same time, several important questions remain unresolved, particularly around digital asset clearing and customer protection requirements. Regulators are still evaluating how existing clearing frameworks apply to digital commodity transactions and whether additional safeguards may be required.
Another challenge for firms operating across both securities and digital commodity markets is the potential for overlapping regulatory oversight. Today, no formal shared examination framework exists between FINRA and the NFA for dual-registered intermediaries. As a result, firms operating both SEC-regulated and CFTC-regulated platforms may face parallel examinations and supervisory expectations until more coordinated oversight frameworks emerge.
What Firms Should Be Doing Now
Even though the CLARITY Act is still moving through the legislative process, firms should already be evaluating how potential changes could impact compliance frameworks, employee oversight, and regulatory obligations.
Key areas to focus on include:
- Reviewing digital asset classifications to determine how different tokens and products may fall under future SEC, CFTC, or banking regulator oversight
- Assessing potential registration exposure for digital asset managers, advisers, brokers, and trading platforms
- Updating employee trading and PAD policies to address digital commodities, insider risk, and emerging forms of market activity
- Evaluating whether restricted lists, surveillance controls, and preclearance systems are equipped to monitor digital asset activity effectively
- Preparing for potential dual regulatory oversight where firms may face both FINRA and NFA examination requirements
- Monitoring unresolved legislative and political issues that could impact AML obligations, stablecoin oversight, DeFi governance, and pay-to-play compliance risks
While final rules may still be years away, the operational and governance changes required to support them could take significant time to implement. Firms that begin preparing now will be in a stronger position to adapt as the regulatory framework evolves.
How StarCompliance Can Help
As firms prepare for a more structured digital asset regulatory environment, having the right compliance infrastructure in place will become increasingly important. StarCompliance (Star) helps firms manage employee crypto and digital asset activity through its Crypto Dealing & Tokenized Asset Compliance Solution, designed to support pre-clearance, post-trade monitoring, restricted list management, surveillance, and oversight across both traditional and digital markets.
By helping firms unify employee compliance, surveillance, and governance workflows, Star enables organizations to better manage emerging risks tied to digital assets, tokenized products, and evolving regulatory expectations.
To learn more about Star’s crypto compliance capabilities and book a demo, click [HERE].
