The CLARITY Act (Digital Asset Market Clarity Act, H.R.3633) advanced through the Senate Banking Committee in June 2026, promising to bring cryptocurrency under a single legal framework. Yet an investigation by the International Consortium of Investigative Journalists (ICIJ) published June 24 reveals that law enforcement groups and major banks have flagged dangerous anti-money laundering loopholes in the legislation.
What Happened
The Senate Banking Committee approved the CLARITY Act in June 2026, moving the most comprehensive U.S. crypto market structure bill toward a full Senate vote. The legislation aims to define digital assets as commodities or securities, establish registration requirements for digital commodity exchanges, and create a regulatory framework for stablecoins alongside the parallel GENIUS Act (S.394). This follows earlier crypto funding rounds like Morpho $175M funding and Digital Asset $355M raise.
However, the ICIJ Coin Laundry investigation found that the committee-approved bill fails to fully address four critical gaps: anti-money laundering (AML) compliance, sanctions evasion prevention, offshore platform oversight, and DeFi-related vulnerabilities. Transparency International U.S. warned that these loopholes could allow corrupt actors and dirty money to flow through the crypto ecosystem unchecked, according to their analysis.
A National Security Advisory from the Senate Banking Committee minority echoed these concerns, stating the bill fails to close a loophole that could allow anyone outside the United States to pay sanctioned actors in stablecoins instead of dollars. The advisory warned that trends favor criminals who are already laundering billions through crypto, facilitating child abuse, ransomware attacks, and terrorist financing.
Why It Matters
The CLARITY Act represents the closest the U.S. has come to comprehensive crypto regulation. Galaxy Digital estimated a 60% probability of passage in 2026, down from 75% in May, as the Senate calendar tightens before the recess deadline, per their research. The bill needs 60 votes to overcome a filibuster and would then proceed to the House.
If enacted with current gaps, the legislation could inadvertently legitimize a regulatory framework that law enforcement says is insufficient to track illicit finance, a concern also seen in the New York stablecoin crackdown. TRM Labs noted that while CLARITY contains the most extensive statutory tools for digital asset law enforcement ever proposed, the Bank Policy Institute identified material gaps in the AML/CFT regime across the digital asset ecosystem. Major banks have lobbied for stronger provisions, arguing the current text leaves compliance obligations ambiguous for digital asset intermediaries, similar to issues raised during the OneMiners crypto payment adoption surge.
What's Next
The bill now awaits Senate floor time, with Senator Cynthia Lummis (R-WY) indicating passage hinges on securing enough non-crypto legislative priorities to clear the calendar. A coalition of transparency and anti-corruption groups has submitted letters to Senate leadership urging amendments to close the five identified corruption gaps before final passage, echoing regulatory scrutiny seen in Trump's CLARITY Act analysis.
The GENIUS Act for stablecoin regulation moves in parallel, with FinCEN and OFAC proposing rules treating stablecoin issuers as financial institutions, as detailed in White House statements. Meanwhile, the ICIJ Coin Laundry investigation continues, with more than 100 journalists from 38 outlets exposing how cryptocurrency platforms profit from proceeds of crime. The outcome of this legislative battle will set the template for global crypto regulation and determine whether the U.S. closes the door on illicit finance or leaves it ajar. For context on previous crypto market moves, see our coverage of the Bitcoin sell-off and Bitcoin below $60K.