Clarity Act Will Protect Users From Catastrophic Losses

Lummis Points to Voyager as the Case for Strict Custody Rules

@SenLummis is pressing Congress to pass the Digital Asset Market Clarity Act, formally H.R. 3633, with a pointed message for retail crypto holders: the bill exists because of what happened to users of platforms like Voyager. When Celsius filed for bankruptcy in 2022, customers discovered their deposits were effectively unsecured loans to the company. Voyager customers faced a similar outcome. And FTX's collapse revealed that customer funds had been commingled with trading firm Alameda Research in ways that made recovery an exercise in forensic accounting.

Each of those situations exposed the same gap: US bankruptcy law does not treat customer crypto deposits the way it treats securities held in a brokerage account. Traditional brokerage customers benefit from SIPC protections and clear legal frameworks that keep their assets segregated. Crypto customers have been operating without that safety net. The Clarity Act is designed to close it.

What the Bill Actually Requires

The Clarity Act imposes a detailed set of consumer-protection requirements on digital commodity exchanges, brokers, and dealers. Customer digital assets must be held by a "qualified digital asset custodian," defined as an entity regulated by a federal, state, or foreign authority. Custodians must segregate customer assets from their own holdings and from other customers' holdings, with commingling restricted unless explicitly authorized under clearly defined and disclosed conditions.

Rehypothecation of customer assets is prohibited unless the customer provides explicit approval. Critically, the bill would mandate that digital assets held by a broker or exchange are treated as the customer's property in bankruptcy proceedings, not as part of the firm's general estate to be divided among institutional creditors. That directly addresses the pattern seen in the Voyager and Celsius collapses, where retail users recovered only a fraction of their holdings after senior creditors were paid.

The bill also creates a broader regulatory framework for digital assets, establishes new SEC disclosure rules for certain tokens, and extends anti-money laundering and sanctions rules to crypto exchanges.

The Clarity Act has already passed the House by a bipartisan vote of 294 to 134 and advanced through the Senate Banking Committee in May 2026 with a 15 to 9 vote. The bill is now on the Senate Legislative Calendar, meaning it is ready for further consideration, though Senate leaders have not yet scheduled a final vote. The legislation requires 60 votes to overcome a filibuster, meaning Republicans will need support from several Democrats. Senate Majority Leader John Thune will make the final call on which week to bring it to the floor, with the week of July 20 the most likely target.

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