The U.S. House Financial Services Committee scheduled a July 17 field hearing in New York on the Digital Asset Market Clarity Act (CLARITY Act) as lawmakers continue debating a federal framework for crypto market oversight. The hearing follows the Senate Banking Committee's 15-9 vote on May 14 to advance the legislation, though prediction market Polymarket currently places the chance of the bill becoming law this year at 43%, down 22 percentage points. The session, titled "Building the Future of Finance: How the CLARITY Act Unlocks Innovation," will gather feedback from exchanges, investors, financial institutions, and blockchain firms on how the bill would divide authority between the Commodity Futures Trading Commission and the Securities and Exchange Commission.
House Financial Services Committee Schedules July 17 New York Hearing
The House Financial Services Committee placed the CLARITY Act hearing within a wider July agenda. The committee also scheduled a July 14 hearing on Federal Reserve monetary policy, where lawmakers are expected to discuss interest rates, inflation, and the broader economic outlook.
The July 17 session in New York is expected to focus on how the bill would divide authority between the Commodity Futures Trading Commission and the Securities and Exchange Commission. The legislation seeks to define when digital assets fall under commodities oversight and when they should be treated as securities.
The bill includes protections for some non-custodial crypto infrastructure providers. Language in the bill could exempt open-source software developers, node operators, oracle providers, and non-custodial wallet developers from certain money-transmitter or broker-dealer requirements if they do not control customer funds.
Senator Cynthia Lummis said the CLARITY Act makes clear that writing code is not money transmission. She said that distinction will matter for future builders and warned that regulatory uncertainty has pushed developers outside the United States.
Section 604 Ethics Provisions Face Negotiation Hurdles
The bill faces several hurdles before it can reach the president's desk. Lawmakers must secure 60 votes in the Senate, resolve differences with the Senate Agriculture Committee's version, and agree on a final text that can pass both chambers.
Negotiations have reportedly become more difficult over ethics provisions and Section 604. Some Democrats want language barring federal employees, including the president and members of Congress, from sponsoring, endorsing, or issuing digital assets.
Those talks have become more sensitive because of crypto-related ventures tied to the Trump family, including a memecoin and World Liberty Financial. The White House has denied conflicts of interest, while some Democrats have said final ethics language must prevent public officials from using digital asset markets for private benefit.
Senator John Kennedy said the final deal may require direct approval from President Trump. Senator Adam Schiff said Democrats remain unsure whether any agreement reached with White House crypto adviser Patrick Witt would survive final White House review.
Industry Groups State Positions on Innovation and Safeguards
Crypto industry advocates argue that the CLARITY Act would create rules for markets that currently operate under fragmented oversight. Solana Institute's Kristin Smith said the bill is not deregulatory and would provide oversight, consumer protections, and law enforcement tools where gaps exist.
Smith also defended the Blockchain Regulatory Certainty Act, saying it draws a line between custodial financial activity and non-custodial infrastructure. She said developers who write open-source code, run nodes, or validate transactions without controlling customer money should not be treated as money transmitters.
Other groups raised concerns over illicit finance safeguards. Catholic organizations and anti-trafficking advocates warned that parts of H.R. 3633, including Section 604, could create regulatory ambiguities that traffickers, organized crime groups, and sanctions evaders may exploit.
FAQ
What did the Senate Banking Committee do on May 14 regarding the CLARITY Act?
The Senate Banking Committee voted 15-9 on May 14 to advance the CLARITY Act legislation.
Why did Polymarket odds for the CLARITY Act becoming law drop 22 percentage points?
Polymarket currently places the chance of the CLARITY Act becoming law this year at 43%, down 22 percentage points, as negotiations continue over ethics provisions and Section 604.
What did Senator Cynthia Lummis say about the CLARITY Act and code writing?
Senator Cynthia Lummis said the CLARITY Act makes clear that writing code is not money transmission, a distinction she said will matter for future builders.
