Securities Regulation Daily Wrap Up, EXCHANGES AND MARKET REGULATION—Scott defends CLARITY Act against criticism while Warren faults bill, (May 13, 2026)

By Shashi Kant, BALLB, LL.M.

Senate Banking Committee materials say the bill protects investors, addresses illicit finance, and preserves lawful innovation; critics say it omits needed ethics, investor, and anti-money laundering safeguards.

Senate Banking Committee Republicans and Ranking Member Elizabeth Warren (D-Nass.) offered different views of the Senate’s updated CLARITY Act text as the committee prepared for markup, while outside advocacy and industry groups were divided over whether the bill would strengthen oversight of digital assets or create new regulatory gaps. Committee Chairman Sen. Tim Scott’s (R-S.C.) office released a “myth vs. fact” document arguing that the bill would create enforceable guardrails for digital asset markets, protect consumers and investors, and strengthen anti-fraud, anti-money laundering, and national-security protections. Warren, by contrast, released a statement criticizing the absence of a Trump-focused ethics provision, saying the bill would put investors, national security, and the financial system at risk.

Scott, along with committee members Cynthia Lummis (R-Wyo.) and Thom Tillis (R-N.C.), recently released the text of the bill aimed at establishing rules for digital assets (see Banking and Finance Law Daily, May 12, 2026). Scott’s newly released materials framed the CLARITY Act as the product of more than 10 months of bipartisan negotiations and extensive engagement with regulators, law enforcement, academics, and industry. The Senate Banking Committee majority said the bill would require educational materials and financial-literacy coordination for retail participants, preserve antifraud authority, apply Bank Secrecy Act requirements to digital asset brokers, dealers, and exchanges, and authorize targeted new Treasury tools to address foreign digital-asset money laundering concerns. The majority materials also said the bill would require registration and anti-fraud controls for digital asset kiosks and would include risk-management standards and studies on mixers, tumblers, cybersecurity, and national-security threats.

Committee materials dispute claims bill weakens securities law, enables illicit finance. In the myth-versus-fact document, Banking Committee Republicans argued that the bill relies on “longstanding securities law principles” to distinguish digital asset securities from commodities and would preserve SEC enforcement authority over digital asset securities and primary offerings of ancillary assets. The document also rejected claims that the bill creates loopholes for evasion of U.S. rules, asserting instead that it would reduce jurisdictional ambiguity between the SEC and CFTC and establish a joint advisory committee to harmonize digital asset requirements. On anti-money laundering and national security, the document said the bill would subject intermediaries to AML and counterterrorist-financing requirements, strengthen sanctions compliance, and authorize Treasury to act against high-risk foreign activity. It also defended the bill’s treatment of DeFi and self-custody, stating that lawful software development and self-custody would be protected without shielding fraud or other misconduct.

Warren attacks absence of ethics language. Warren’s statement focused on what she described as a major omission from the revised legislation: the lack of any provision addressing President Donald Trump’s and his family’s crypto interests. Warren said the bill includes “zero provisions” to prevent conflicts tied to those ventures and argued that no committee member should support legislation that fails to address what she called the “massive conflict of interests” posed by the Trump family’s crypto activities. Her statement said the bill would “turbocharge Donald Trump’s crypto corruption.”

Outside groups divide along expected lines. Americans for Financial Reform criticized the revised legislation as “deeply flawed” and said it would continue to leave Trump-related ethics concerns unaddressed. AFR also argued that the bill would allow “tokenized” versions of stocks and bonds, create broad carveouts from investor-protection requirements, and weaken anti-money laundering safeguards by partially or fully exempting some DeFi platforms and crypto developers. The group said those features would enrich the crypto industry while increasing risks for investors and the broader financial system.

On the other hand, the Blockchain Association and the Crypto Council for Innovation urged committee members to support the legislation at markup and said the updated text would establish clear oversight, robustly protect consumers, and provide the regulatory certainty needed for responsible innovation. The groups argued that, without a comprehensive federal framework, developers, capital, companies, and market activity would continue to move offshore, while the right framework would strengthen U.S. financial markets, reinforce market integrity, support law enforcement, and help keep digital asset development in the United States.

Companies: Americans for Financial Reform; Blockchain Association; Council for Innovation

LegislativeActivity: Blockchain CommodityFutures Derivatives ExchangesMarketRegulation SecuritiesOfferings Swaps