The CLARITY Act could reshape how you buy crypto. Here’s what’s at stake

Millions of people invest in cryptocurrency to grow their money, get in on a new technology or diversify their portfolios. But unlike banks and credit unions, cryptocurrency platforms haven’t had to follow the same rules to keep their investors’ money safe from misuse. But on Tuesday, the Senate could change that.

That gap has led to major scandals, like the collapse of cryptocurrency trading company FTX, that cost investors billions of dollars. Now, U.S. lawmakers could try to catch up with the technology through the CLARITY Act, a bill that would create new rules for cryptocurrencies and the platforms that hold them.

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Many in the crypto industry support the bill, arguing it would finally give U.S. regulators real authority over digital assets. But critics say it doesn’t go far enough to protect investors — and that the Commodity Futures Trading Commission, which would oversee some cryptocurrencies under the bill, doesn’t have the size or experience to regulate a market this large. 

What does the CLARITY Act do?

For years, the CFTC and Securities and Exchange Commission have fought over who’s in charge of cryptocurrencies. Earlier this year, the two agencies released new guidance on how they’d regulate digital currency, but that guidance isn’t law, and either agency could change it without Congress.