US Cryptocurrency Regulation Turns Quantitative: How the CLARITY Act Revision Strengthens Computational Constraints on Asset Governance

The U.S. Senate Banking Committee has cast a pivotal vote and conducted a review of the revised version of the “CLARITY Act,” marking a fundamental overhaul of the United States’ cryptocurrency regulatory framework. Moving away from the past “qualitative judgment era,” which relied on discretionary authority of regulatory agencies, the U.S. regulatory system has officially transitioned into a “quantitative decision era” based on the underlying technological features of blockchain and measurable computational indicators. This shift not only redefines how the legal nature of digital assets is determined but also profoundly changes the compliance capabilities that Virtual Asset Service Providers (VASPs) must possess.

Legislative Trajectory of the CLARITY Act: Key Amendments from the House to the Senate

The legislative process of the “CLARITY Act” (H.R.3633) clearly reflects the evolution of crypto regulation thinking:

In July 2025, the House passed the original version with 294 votes in favor and 134 against, establishing for the first time a functional division framework between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) at the national level. Subsequently, in September 2025, the bill was submitted to the Senate but immediately became the center of intense debate over the impact of stablecoins on traditional banking reserves. On January 12, 2026, Senate Banking Committee Chair Tim Scott released a bipartisan negotiated latest revision, further strengthening criminal liability constraints on stablecoin issuers and refining technical verification procedures related to “blockchain maturity.”

These amendments embody a core logical shift: regulation no longer relies on vague administrative interpretations but instead uses verifiable and computable quantitative indicators to determine asset nature.

Quantitative Determination of Mature Blockchains: The 20% Control Threshold Calculation Logic

Section 205 of the CLARITY Act is the “logical cornerstone” of the entire law, replacing the long-debated “Howey Test”—a decades-old ambiguous standard for securities classification—with precise mathematical metrics.

The bill explicitly states that for a blockchain system to be recognized by the CFTC as a “digital commodity,” it must meet the following quantitative criteria over the past 12 months: the combined voting rights held by the issuer, related parties, and concerted actors must not exceed 20%; simultaneously, no single entity should have the authority to unilaterally make substantial modifications to the protocol code.

This regulation poses significant auditing challenges for virtual asset service providers. When conducting asset due diligence (KYA, “Know Your Asset”), VASPs can no longer rely solely on whitepapers provided by project teams but must possess the capability to perform deep governance structure analysis. For example, even if tokens are widely dispersed across thousands of addresses in Layer 2 scaling solutions or DeFi applications, if the founding team controls key protocol functions through multi-signature mechanisms, the system could legally be classified as “non-mature,” and thus regarded as a security rather than a commodity.

Furthermore, the law requires mature systems to have publicly accessible source code and fully verifiable transaction histories. This means private chains lacking transparency or sidechains with strong centralization features will almost certainly be unable to gain listing on mainstream compliant exchanges under the new regulatory framework.

Upgrading Stablecoin Audits: From Attestation to Examination with Enhanced Responsibilities

For “permitted payment stablecoins,” the bill establishes a regulatory framework comparable to traditional banking standards. Section 512 mandates that stablecoin issuers submit a monthly highest-level audit assurance report—“Examination.” This differs fundamentally from lower-level “Attestation” audits: Examination requires auditors to directly penetrate underlying reserves (such as government bonds, cash accounts, etc.), rather than merely verifying the issuer’s reported financial statements.

More stringently, the bill introduces Section 18 of the U.S. Criminal Code, explicitly requiring CEOs and CFOs to personally confirm the authenticity of each monthly audit report. Any concealment of reserve shortages will lead to federal criminal charges against senior executives. This “responsibility to the individual” mechanism aims to fundamentally improve issues like algorithmic de-pegging and reserve falsification that have frequently plagued the stablecoin market.

Digital Asset Adaptation of the Bank Secrecy Act: Mandatory Integration of Distributed Ledger Analysis Tools

Amendments to the Bank Secrecy Act (BSA, codified at 31 U.S.C. 5312) represent the first legal recognition of on-chain analysis technology. The revised provisions explicitly require digital commodity brokers and exchanges to adopt “appropriate distributed ledger analysis tools” to monitor and report suspicious activity (commonly known as SAR).

This regulation transforms on-chain analysis software from an optional operational cost into a mandatory compliance requirement. Failure to integrate compliant analysis tools will be regarded as a breach of BSA compliance, directly affecting registration and operational eligibility within the financial system.

Meanwhile, Section 105 explicitly protects the rights of U.S. individuals to hold self-managed wallets and conduct peer-to-peer transactions. This presents a regulatory dilemma: on one hand, VASPs are required to identify illicit sources of funds; on the other hand, restrictions on personal hardware wallets are prohibited. This seemingly contradictory requirement forces on-chain monitoring logic to evolve from simple “address label matching” to “multi-hop behavioral topology analysis.” VASPs need to track complex fund flows without infringing on privacy, demonstrating that deposits have not passed through sanctioned entities or illegal mixing services.

The Path to Compliance Upgrades for VASPs: Urgent Need for Technological Infrastructure

In response to these regulatory shifts, virtual asset service providers must undertake multi-layered upgrades to their compliance infrastructure:

First, automated asset management audits are essential. Entities with only basic KYC capabilities will be unable to meet the precise asset classification requirements under the new framework. Developing systems capable of automatically calculating governance concentration, verifying control over code, and assessing decentralization has become an urgent necessity.

Second, transaction monitoring capabilities must be enhanced. Traditional address blacklisting methods are insufficient to handle complex cross-chain movements and mixing behaviors. VASPs must deploy advanced on-chain analysis tools capable of identifying multi-hop fund trajectories, tracking funds across bridges and DEXs.

Third, integrity of audit records must be ensured. Especially for exchanges dealing with stablecoins, continuous 24/7 risk monitoring mechanisms should be established to perform real-time risk scans of core reserve addresses, with immediate alerts and isolation upon detecting anomalies. This not only bridges the gap between monthly audits but also provides regulators with a complete audit trail.

Conclusion

The CLARITY Act does not represent the final version of crypto regulation but rather a directional marker for 2026. Its core focus is clear: to determine asset nature through computable and verifiable quantitative indicators, require VASPs to possess deep governance analysis capabilities, and mandate the integration of distributed ledger analysis tools as a compliance prerequisite. This shift from qualitative to quantitative regulation demands the entire industry to reassess and upgrade its technological infrastructure to adapt to the upcoming era of quantitative oversight.

Note: This analysis is based on draft bills and revision proposals publicly available before January 14, 2026. As the bill is still under review, final provisions may be adjusted during the legislative process.