Lummis' Clarity Act Seeks Crypto Custody Safeguards

Senator Cynthia Lummis has highlighted a key aspect of her proposed Clarity Act legislation, which would protect customer cryptocurrency assets in exchange bankruptcies.

The bill aims to close a regulatory gap that has left users as unsecured creditors in past crypto bankruptcies, bringing crypto custody rules closer to traditional brokerage standards.

Lummis emphasized that under the proposal, Bitcoin (BTC), Ethereum (ETH), and other customer assets would not become part of an exchange's bankruptcy estate if the platform fails.