WASHINGTON — Sen. Cynthia Lummis said the CLARITY Act would mandate segregation of customer digital assets, ensuring they remain outside a platform's bankruptcy estate. The bill targets protections for investors holding funds on centralized exchanges and establishes a clear legal framework for asset custody in the United States.
Past insolvencies — FTX, Celsius and Voyager — showed how commingled funds left customers as unsecured creditors, often recovering only a fraction of their original holdings. The CLARITY Act targets the core issue directly: platforms treating user deposits as their own balance sheet assets. It would legally require platforms to keep customer capital distinct from operational funds, a critical safeguard for anyone carrying positions on an exchange.
Mandatory segregation would push exchanges toward verifiable proof-of-reserves mechanisms or dedicated multi-signature wallets for customer funds, enabling clearer on-chain auditing of segregated assets. For the first time, a U.S. federal law would explicitly define crypto assets as property of the customer, not the platform — a shift in legal standing that changes counterparty risk calculations for every investor using a centralized service.
The Crypto Fear & Greed Index sits at 28, signaling widespread fear following market downturns and regulatory uncertainty. Regulatory clarity and stronger asset protection, as proposed by the CLARITY Act, could help rebuild confidence and stabilize market infrastructure, potentially encouraging broader institutional participation and retail adoption by reducing systemic risk.
Exchanges would need to overhaul internal controls and redesign wallet architecture to comply with the segregation mandates. That means combining cold storage, multi-party computation wallets and frequent attestations to prove asset separation — bringing platform practices closer to traditional financial custody standards.
The CLARITY Act awaits review and debate in the Senate Banking Committee, where it will face scrutiny from stakeholders and industry experts. Its progress will determine the timeline for a potential floor vote.
