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Senator Cynthia Lummis is pushing the CLARITY Act as a direct response to North Korea’s Lazarus Group, the state-sponsored hacking operation that has turned crypto theft into a national revenue stream. The bill would hand the Treasury Department expanded authority to freeze suspicious transactions and impose sanctions on foreign digital asset firms engaged in illicit finance.
What the CLARITY Act actually does
The Digital Asset Market Clarity Act, formally designated H.R. 3633, grants Treasury new sanctions authority to target foreign digital asset entities involved in illicit activities.
Section 10305 of the bill introduces a safe harbor provision for digital asset firms that freeze suspicious transactions. If a compliant exchange or stablecoin issuer spots something shady and hits pause on a transaction, they won’t get sued for it. Right now platforms face genuine legal risk when they unilaterally freeze customer funds, even when those funds are clearly tied to criminal activity.
The bill also extends Bank Secrecy Act and anti-money laundering requirements to digital asset exchanges and certain DeFi platforms.
On the enforcement funding side, the CLARITY Act proposes $150 million for the Financial Crimes Enforcement Network (FinCEN) to build out its digital asset rulemaking capabilities, plus another $150 million in grants for state and local law enforcement.
The bill also establishes information-sharing frameworks among the Department of Justice, Treasury, and Department of Homeland Security.
The legislative timeline
Lummis released the updated bill text on July 22, 2026. The House passed the bill with a vote of 294-134 on July 17, 2025. The Senate Banking Committee followed with a 15-9 vote in May 2026, advancing it to the full Senate floor.
Lummis has indicated this legislation may represent the final opportunity to implement comprehensive digital asset rules before 2030, arguing that if the US doesn’t establish its own framework now, other nations will set the global standards for digital finance.
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