On 22 July 2026, Senate Banking Committee Chair Tim Scott and Senators Cynthia Lummis and Thom Tillis released updated text for the Digital Asset Market Clarity Act (H.R. 3633, 119th Congress). The release reflects consolidated work product from both the Senate Banking and Agriculture Committees following a bipartisan Senate Banking Committee markup vote. The bill remains proposed legislation. No Senate floor vote date has been announced.
The bill proposes a new regulatory category called Regulation Crypto, which would allow issuers of ancillary digital assets connected to an investment contract to offer and sell those assets to retail investors without full SEC registration, subject to specified disclosure conditions. Title II addresses illicit finance obligations in the digital asset sector, including AML/CFT requirements. The updated July 2026 text draws a statutory line between software developers and peer-to-peer participants, who would face no compliance obligations, and centralised entities interacting with DeFi protocols, who would face tailored risk management, cybersecurity, and compliance requirements. The text adds ethics provisions restricting specified categories of government officials from holding or transacting in digital assets while in office.
Digital asset exchanges, brokers, dealers, and issuers operating in the United States would face a structured regulatory choice between CFTC and SEC oversight under the bill. The determining factor is whether a given asset qualifies as a digital commodity or a digital asset security under the bill's classification rules. Centralised entities interacting with DeFi protocols would be subject to compliance requirements not imposed on underlying protocol developers or peer-to-peer users. Retail investors would gain access to certain digital asset offerings under Regulation Crypto that are currently unavailable to non-accredited investors. The ethics provisions would restrict specified government officials from holding or transacting in digital assets during their tenure.
Democratic members of the Senate Banking Committee have raised objections to the ethics provisions, arguing the loopholes are material. Senator Warren's minority statement specifically criticises the scope of the exemptions. No Senate floor vote timeline has been announced, and passage is not assured. The commodity/security classification of specific assets remains subject to future agency rulemaking under the bill's proposed authority structure. The CFTC and SEC jurisdictional boundary that the bill proposes has been contested between the two agencies in prior rulemaking proceedings.
Licentium advises digital asset businesses on US regulatory positioning as the Digital Asset Market Clarity Act advances through the legislative process. Contact us to assess how the Regulation Crypto exemption and the classification rules may apply to your token structure and business model. Work we undertake includes digital asset securities analysis, AML/CFT compliance for crypto firms, CFTC and SEC regulatory mapping, and US market structure advisory.