The Digital Asset Market Clarity Act of 2025, AKA The CLARITY Act, was expected to be the next milestone legislation passed by the United States Congress regarding cryptocurrency regulations, but a last minute rewrite of the bill by the Senate Banking Committee.

On January 13th 2026 the bill had bipartisan support, support from the crypto industry, and was to be cleaned up for a full Senate vote.

Instead of a cleaned up bill, there were 137 last minute amendments. Some good, some bad, and some ugly.

The good parts of the bill involve clarifying who has jurisdiction over various blockchains.

Mature, decentralized blockchains such as BTC and ETH would be considered commodities and regulated by the CFTC.

In order to be considered mature and decentralized, no single entity can control more than 20% of the supply or voting power. Also the code must be open source.

Everything not in the CFTC’s jurisdiction would fall under the SEC’s jurisdiction as securities.

Although Coinbase and other crypto firms have been lobbying for the CLARITY Act for quite some time, they withdrew their support over the BAD last minute amendments.

The banking lobby convinced some Senators that the ability to offer yield on stablecoins would destroy the traditional banking sector, who pocket billions of dollars every year, lending your money to the government and hoarding the majority of the interest.

Coinbase has also been building towards a future where real world assets such as gold and stocks are traded 24/7 on chain. The latest version of the bill kills the legal framework for tokenized assets.

The ugliest side of the bill is the attack on the decentralization of DeFi.

The current version of the bill wants to give the Office of Foreign Asset Controls (OFAC) the ability to force sanctions and AML compliance.

They would accomplish this by requiring all services that provide front-end access to DeFi to collect personal information such as name, address, and SSN.

Essentially taking the decentralization out of dectralized finance.