Senate Republicans have released a 630-page rewrite of the Digital Asset Market Clarity Act that would replace the House-passed H.R.3633 and create a new division of authority between the Securities and Exchange Commission and Commodity Futures Trading Commission. Its immediate test comes Sept. 15, when the Senate is scheduled to vote on whether to begin consideration of the measure—a procedural step requiring 60 votes.
The revised text, published Sept. 10, had not secured Democratic Senate support at the time of its release. Failure to clear the cloture vote would leave the House bill stalled and preserve the SEC’s and CFTC’s current regulatory approach to cryptocurrency markets.
Republicans are presenting the new language as a substitute amendment rather than asking the Senate to take up the House bill unchanged. That route gives Senate committees room to impose their own framework for exchanges, brokers, token issuers, decentralized-finance protocols, stablecoin-related rewards, and credit unions.
The House passed H.R.3633 in July 2025 by a 294-134 vote, with support from 78 Democrats. In the Senate, the Banking Committee advanced an earlier version of the legislation in May by 15-9. Those votes show some bipartisan interest in market-structure legislation, but the Sept. 15 threshold is higher than a simple majority and will require support beyond Senate Republicans.
A larger Senate framework for crypto oversight
The September draft expands a 616-page version released in July, which first combined approaches developed by the Senate Banking and Agriculture committees. The updated document adds 14 pages and incorporates more than 100 proposed changes from Democratic lawmakers, according to Senator Cynthia Lummis, chair of the Senate Banking Committee’s digital assets subcommittee.
At its core, the bill would place digital commodity exchanges, brokers and dealers under CFTC registration and oversight. Those businesses would face requirements on customer-asset segregation, recordkeeping, conflicts management and bankruptcy protections.
The customer-asset rules address a central weakness exposed by several major platform failures: the commingling or misuse of client property by companies operating trading venues. Under the proposed framework, registered intermediaries would be required to separate customer holdings from corporate assets, a safeguard designed to limit the risk that customer coins or cash become entangled in a company’s operating expenses or insolvency proceedings.
Securities and tokenized equities would remain subject to SEC oversight. The bill also establishes a category of “ancillary assets” for certain network tokens, pairing the classification with disclosure obligations on a project’s development progress, token distribution and holdings held by affiliated parties.
That approach would give issuers and intermediaries a statutory path for assessing which regulator governs a particular asset, rather than leaving the distinction largely to enforcement actions and court disputes. It would not remove the SEC’s authority over tokens that qualify as securities under the bill’s framework.
The CFTC, SEC and Treasury Department would have one year after enactment to issue joint rules implementing major parts of the legislation. Most of the bill’s provisions would take effect 360 days after enactment, while rulemaking-related provisions would become effective 60 days after final regulations are published.
DeFi rules turn on actual control
The revision’s most consequential change for decentralized finance is a CFTC registration pathway for protocols that are described as non-decentralized. Instead of relying on labels such as decentralized autonomous organization, foundation or open-source project, the bill would examine who can actually influence the system’s functions and users.
A protocol could fall within the proposed non-decentralized category if a controller can alter its functions, operations or consensus rules; if transactions are not performed solely through prewritten and transparent code; or if a person can restrict, censor or ban users.
Those tests place particular pressure on projects whose teams retain upgrade keys, emergency pause mechanisms, transaction-review powers or control over user assets. Parties exercising those functions could be treated as conducting brokerage, trading, execution, clearing or custody activities, triggering CFTC registration as well as disclosure, supervision, record-retention and Bank Secrecy Act obligations.
The language attempts to avoid treating every technical contributor as a regulated intermediary. Running a node, supplying oracle data, publishing code, developing a non-custodial wallet or providing a read-only interface would not independently create a registration requirement. Serving solely on a security committee or incident-response team also would not alone establish the level of control covered by the measure.
The distinction would make governance design more than a branding question. Protocols with enforceable constraints on administrators and transparent, automated transaction processing would have a stronger basis for arguing they are outside the non-decentralized framework. Teams retaining practical authority over user access or core code changes could face a far different compliance burden.
The DeFi provisions apply on the CFTC side only to digital commodity spot and cash transactions. Prediction markets would not automatically receive the same treatment because many operate through event contracts. The draft does not classify event contracts as gambling products, leaving ongoing disputes over CFTC authority, state law and tribal gaming compacts unresolved.
Stablecoin rewards and public-official limits remain
The Senate text retains a restriction on crypto service providers and their affiliates paying U.S. users passive interest or yield solely for holding payment stablecoins. It permits rewards connected to activity such as payments, transfers, exchange, settlement or liquidity provision.
That structure draws a line between compensation for using a stablecoin network and returns paid simply for maintaining a balance. Platforms offering stablecoin yield products would need to assess whether their reward programs are tied to qualifying activity under the eventual joint rules.
The draft also preserves ethics provisions barring public officials, federal employees and their spouses from issuing or sponsoring digital assets in exchange for consideration while in office. They could continue holding digital assets. Enforcement would rest exclusively with the U.S. attorney general through civil actions, excluding lawsuits by private parties and state attorneys general. The restriction would expire at noon on Jan. 20, 2029.
Technical revisions would allow federal credit unions to use digital assets or distributed ledger technology in activities they are already authorized to conduct, including payments, lending, custody and trading. Insured credit unions could do the same under equivalent conditions. The bill states that this provision does not expand statutory powers or override capital, risk-management or consumer-protection rules.
Even if the Sept. 15 motion succeeds, the Senate would still need to process amendments and approve final passage. Any version that differs from H.R.3633 would then require House approval of the Senate’s language or a negotiated compromise between the chambers before it could be sent to the president.
For deeper context on U.S. crypto oversight shifts, read this detailed breakdown of future regulation scenarios.
Disclaimer: The content on this page is provided for general informational purposes only and does not represent the views or financial advice of Toobit. We make no guarantees regarding the accuracy or completeness of this information and shall not be held liable for any errors, omissions, or outcomes resulting from its use. Investing in digital assets involves risk; users should independently evaluate their financial situation and the risks involved. For further details, please consult our Terms of Service and Risk Disclosure.
