Lummis Warns Senate of Crypto Innovation Exodus if CLARITY Act Fails

Senator Cynthia Lummis is urging her Senate colleagues to advance the CLARITY Act ahead of a crucial vote on September 15.

Lummis warned that rejecting the legislation could push digital-asset innovation to China and weaken the US position in global financial markets, citing FTX customers who waited years to recover their funds as evidence of the need for clearer crypto rules.

The CLARITY Act would treat digital commodities as customer property in bankruptcy, determining how those assets are handled if a platform fails. Lummis also highlighted the bill's requirement for qualified custodians and segregated funds, keeping customer assets separate from company funds to prevent another collapse that wipes out customer assets.

Despite bipartisan support being crucial to the passage of the legislation, Republican senators have warned that the bill could fail without an agreement on ethics provisions. Democrats are seeking restrictions related to President Donald Trump's family crypto interests, with Senator Thom Tillis stating that the White House needs to help resolve the dispute over the ethics language.