U.S. Senator: The CLARITY Act will ensure that customers' crypto assets remain the property of the customers in the event of an exchange bankruptcy

According to Bitcoin.com, U.S. Senator Cynthia Lummis stated that the CLARITY Act will change the way customer crypto assets are handled when digital asset platforms enter bankruptcy proceedings; customer assets should continue to belong to the customers, rather than being included in the company's bankruptcy estate.

The bill requires regulated digital asset intermediaries to treat customer cash and digital assets as customer property and to segregate them from company property. The bill also generally prohibits brokers, dealers, and exchanges from using customer assets for their own or others' benefit without authorization.

The bankruptcies of Celsius and Voyager sparked disputes over the ownership of customer deposits. In January 2023, U.S. Bankruptcy Judge Martin Glenn ruled that the cryptocurrency deposited in Celsius Earn accounts became company property under the terms of use, involving approximately 600,000 Earn accounts and about $4.2 billion in assets.

Lummis stated that the CLARITY Act also aims to provide regulatory certainty for developers, enhance investor protection, and improve market integrity. The bill will clarify the responsibilities of the U.S. Securities and Exchange Commission (SEC) and the U.S. Commodity Futures Trading Commission (CFTC) in different areas of the crypto market, and it has already passed the House of Representatives but has not yet passed the Senate.