Will the CLARITY Act Protect Your Crypto When a Platform Collapses?

• The CLARITY Act could keep customer crypto separate from a failed company’s own assets.
• Celsius and Voyager users became unsecured creditors after both crypto firms collapsed.
• The bill still needs Senate approval before its bankruptcy protections could take effect.

The CLARITY Act could strengthen protections for customer crypto when a covered broker or exchange fails. However, the safeguard is not yet law. The Senate version would treat qualifying ancillary assets and digital commodities held for customers as customer property in specified bankruptcy proceedings.

In an X post on Monday, Senator Cynthia Lummis highlighted the treatment of customer deposits in the Celsius and Voyager bankruptcies. The assets did not remain customer property after the companies failed. 

Instead, they became part of bankruptcy estates contested by creditors. She said the CLARITY Act would ensure customers retain ownership of their crypto if a company collapses.

CLARITY Act Targets Customer Ownership

The Digital Asset Market Clarity Act of 2025 is formally known as H.R. 3633. It would treat qualifying digital assets held for users as customer property during bankruptcy.

Those assets would not be treated as company property. They would also remain unavailable to general creditors.

The rule addresses a major risk for users of centralized platforms. Customer-property status could preserve their ownership rights. A different classification may leave them with creditor claims.

For investors, that difference matters. It could decide whether their crypto is returned directly or recovered later through restructuring.

Celsius Case Revealed the Legal Gap

The Celsius bankruptcy showed how platform terms could affect ownership rights. In January 2023, U.S. Bankruptcy Judge Martin Glenn ruled that cryptocurrency deposited into Celsius Earn accounts became company property under its terms of use. 

The decision covered about 600,000 Earn accounts holding approximately $4.2 billion when Celsius filed for bankruptcy. Affected users became unsecured creditors rather than owners of specific digital assets. 

The Voyager customers also found themselves in the bankruptcy process as unsecured creditors. Their recoveries being made through restructuring, rather than the automatic return of deposited crypto. 

Those cases exposed a major uncertainty in the industry. Users could hold balances on a platform without retaining legal ownership of the assets after the business failed. However, the CLARITY Act seeks to prevent that outcome by placing customer ownership into federal law.

Bill Covers More Than Bankruptcy

Lummis has described the bankruptcy provision as one part of a broader framework for the U.S. digital asset market. She has linked the legislation to three goals: regulatory certainty for developers, stronger investor protection and greater market integrity. The customer-property rule directly addresses the investor protection objective. 

Crypto companies have long faced uncertainty over which regulator controls specific assets and market activities. The proposal seeks to draw clearer jurisdictional lines between the SEC and CFTC.

Exchanges would also receive defined registration pathways under federal law. These routes could give platforms a clearer process for meeting regulatory requirements.

Digital asset intermediaries would face explicit anti-money laundering obligations. According to Lummis, the Senate proposal also includes stronger consumer safeguards and tighter financial crime standards.

She has also said lawmakers spent months negotiating the Senate version. The framework is intended to keep crypto innovation and investment in the United States rather than push companies overseas. 

Senate Approval Is Still Required

The House approved H.R. 3633 in July 2025. The Senate Banking Committee later advanced the measure by a 15-9 vote in May 2026.

That committee vote moved the bill toward the Senate floor, but it did not complete the legislative process. The proposal still requires approval from the full Senate.

However, continued delays leave questions about custody, market oversight and investor protection unresolved. The next major development would be Senate consideration and whether lawmakers retain the customer-property provision backed by Lummis.

Does the Bill Protect Crypto Today?

The CLARITY Act does not currently provide federal bankruptcy protection for customer crypto because it has not become law. Its proposed safeguards must clear the remaining legislative stages before taking effect.

Section 701 of the Senate version covers ancillary assets and digital commodities held for customers. In specified bankruptcy proceedings, those holdings would be treated as customer property and distributed under applicable bankruptcy rules.

The provision addresses the ownership uncertainty exposed by Celsius and Voyager. However, it does not guarantee immediate or full recovery in every company failure.

Any final protection would depend on Senate passage, agreement between both chambers and presidential approval. The scope would also depend on the wording preserved in the enacted legislation.

Related: Senate Republicans to Meet Trump as Clarity Act Talks Continue