The biggest U.S. crypto market reform. How the CLARITY Act will reshape compliance

On May 14, 2026, the Digital Asset Market Clarity Act — better known as the CLARITY Act — cleared the U.S. Senate Banking Committee with bipartisan support, 15 votes to 9. This is the most significant progress that any comprehensive crypto market regulation bill has ever made in the U.S. Congress. GetBlock AML Research reviews the changes the new package of laws will bring to the U.S. crypto market.

The CLARITY Act extends the U.S. Bank Secrecy Act to cryptocurrency intermediaries, requires the implementation of risk management programs using blockchain analytics, establishes the first federal registration framework for cryptocurrency kiosks, and grants the U.S. Treasury Department new powers against foreign jurisdictions linked to money-laundering risks involving digital assets.

The bill will now move to a vote by the full Senate, where it will need at least 60 votes. Meanwhile, debate continues around its ethics provisions and questions about law enforcement authority. The document still has to be reconciled with the House version, which was passed in the summer of 2025.

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The general direction, however, is already clear: companies that only start preparing after the law's final passage could find themselves seriously behind.

Key provisions of the law

The CLARITY Act extends anti-money laundering and counter-terrorism financing requirements to all cryptocurrency brokers, dealers, and exchanges. Companies will be required to implement systems for monitoring suspicious transactions, identifying customers, managing sanctions risks, and reporting to government authorities.

Separate requirements apply to services working with DeFi protocols — decentralized financial platforms without traditional intermediaries. Such companies will need to put in place risk assessment systems using blockchain analytics tools to detect fraud, sanctions evasion, and suspicious activity.

The new rules also introduce federal regulation of cryptocurrency kiosks and crypto ATMs for the first time. Operators of these devices will be required to register, implement fraud detection systems, appoint compliance officers, set withdrawal limits, and apply special waiting periods for new customers.

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These measures come in response to a sharp rise in fraud involving crypto ATMs. According to the FBI and AARP, roughly $389 million was stolen through such devices in 2025 alone. More than 13,000 complaints were filed, and the volume of fraud rose 58% over the year.

The U.S. Treasury Department will also gain a new tool — the so-called Special Measure 6. It will allow authorities to restrict or block transactions involving foreign countries, financial institutions, or transaction types deemed to pose money-laundering threats through cryptocurrencies.

The law also creates a pilot program for sharing data between private companies and federal law enforcement to combat illicit financial flows.

What new obligations crypto companies will face

The CLARITY Act effectively brings cryptocurrency intermediaries fully under the requirements of the U.S. Bank Secrecy Act. Exchanges, brokers, and digital asset dealers will need to maintain full-fledged anti-money laundering and counter-terrorism financing programs, monitor suspicious activity, identify customers, and comply with OFAC sanctions.

For many large companies, these procedures already exist under guidance from the U.S. regulator FinCEN. But these will no longer be recommendations — they will be direct statutory requirements, with penalties for violations.

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The law also introduces mandatory examinations for financial institutions dealing with cryptocurrencies. That means compliance will be assessed not as a formality, but through full-scale regulatory inspections.

Particular attention is given to so-called self-hosted wallets — crypto wallets that users manage on their own, without exchanges or banks. The law, for the first time, gives financial institutions clearer guidance on how to deal with such wallets and the risks they pose.

Why authorities are so concerned about crypto ATMs

Section 205 of the bill establishes the first federal oversight framework for cryptocurrency kiosks and ATMs in the United States.

Operators of such devices will be required to register, warn customers about risks, issue receipts, implement anti-fraud systems, appoint compliance officers, monitor suspicious transactions, and impose restrictions on new users.

The reason is simple: crypto ATMs are increasingly being used by fraudsters.

In many cases, criminals convince victims to transfer cash through these devices, promising to "protect their funds," "save their bank account," or "help an investigation." Elderly people are especially common targets.

A further problem is that crypto ATMs quickly convert cash into cryptocurrency, and customers of such services often go through only minimal identity verification.

A new system of pressure on foreign crypto platforms

The CLARITY Act gives the U.S. Treasury Department new powers against foreign jurisdictions that could be used to launder money through cryptocurrencies. Special Measure 6 essentially extends the logic of the well-known PATRIOT Act to the digital asset market.

The law also requires annual reports on the countries with the largest volumes of cryptocurrency trading, their level of compliance with U.S. anti-money laundering standards, and the measures being taken against violators.

In addition, the U.S. Government Accountability Office is to conduct a study on the risks posed by foreign cryptocurrency services from countries with weak regulation that continue to serve American users.

For crypto companies, this represents a major shift in how risk is approached.

It is no longer enough to simply check whether a counterparty is on a sanctions list. Regulators want to see deeper analysis of how cryptocurrency platforms and financial infrastructure actually operate in specific countries.

What will change for DeFi platforms

Section 308 of the bill requires companies interacting with DeFi protocols to assess risks in advance, before any transactions take place. These risks include money laundering, sanctions evasion, fraud, market manipulation, and technical and cyber threats. Crucially, the law for the first time explicitly names blockchain analytics as a mandatory oversight tool.

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This is the first time U.S. legislation has directly enshrined the use of blockchain analytics tools as part of a mandatory compliance framework.

Companies will need to demonstrate that they have full-fledged risk management systems in place and the ability to make decisions about executing, rejecting, or freezing DeFi-related transactions.

Other important provisions of the law

The CLARITY Act also contains a number of additional measures. Section 203 creates a pilot program that allows private companies to share information about financial crimes with federal law enforcement agencies.

FinCEN will also receive additional funding — $30 million per year through 2031. This signals that the government is counting on long-term strengthening of oversight over the crypto market.

The law calls for studies on cryptocurrency mixers and transaction anonymization services, cybersecurity risks, and national security threats. While these are only studies for now, experts believe that these very areas could become the subject of new restrictions in the future.

A separate provision creates so-called safe harbor protection — a legal shield for cryptocurrency companies that temporarily suspend suspicious transactions at the request of law enforcement.

Does the law apply to foreign companies?

Yes. The law also affects non-U.S. companies if they deal with American citizens or interact with American platforms. This applies in particular to foreign cryptocurrency services that serve U.S. customers or work with U.S.-based companies.

When the law could take effect

After clearing the Senate Banking Committee, the bill must receive at least 60 votes in the Senate and then be reconciled with the House version. The White House is hoping the president will be able to sign the document by July 4, 2026.

Some provisions will take effect immediately upon passage, while others will require additional rulemaking by regulators.

What all of this means for the crypto market

The CLARITY Act could become the most sweeping cryptocurrency regulation law in U.S. history. In effect, it moves the digital asset market out of a regime of guidance and vague rules and into a full-fledged system of mandatory government oversight.

For crypto companies, this means rebuilding their monitoring systems, customer due diligence processes, blockchain analysis, and international risk assessment.

At the same time, the market itself is steadily moving closer to the traditional financial system — with strict supervision, international data sharing, and tighter control over the movement of money.