Will the CLARITY Act Protect Your Crypto When a Platform Collapses?
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The CLARITY Act would treat qualifying ancillary assets and digital commodities held for customers as customer property in bankruptcy, aiming to keep customer crypto separate from a failed broker or CEX; users of Celsius and Voyager became unsecured creditors after those collapses. The bill still needs Senate approval, but if passed it could strengthen crypto custody protections, reduce bankruptcy risk for customers, and support greater trust and adoption across crypto, DeFi and exchange markets.
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- 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 …
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