The "CLARITY Act" will be voted on tomorrow; the "main theme" of US crypto regulation has been set.

1. Legal Process and Institutional Evolution Fact-Checking

Based on congressional legislative tracking records and the latest gaming developments as of January 14, 2026, the legislative path of H.R.3633 is as follows:

1. House of Representatives Stage: On July 17, 2025, the House passed the original bill with a vote of 294:134, establishing the initial division of responsibilities between the SEC and CFTC.
2. Senate Negotiation: After being transferred to the Senate on September 18, 2025, the bill faced deadlock due to the impact of stablecoins on traditional banking reserves.
3. Revised Consensus: On January 12, 2026, Senate Banking Committee Chair Tim Scott released the latest bipartisan negotiated draft.
4. Key Milestone: Tomorrow (January 15) at 10:00 AM, the committee’s “markup” vote will determine whether the revision qualifies to be submitted to the full Senate for a vote.

Institutional Observation: Compared to the House version, the Senate revision further strengthens criminal liability constraints on “permitted payment stablecoin” issuers and refines the verification procedures regarding “blockchain maturity.”

2. KYA’s Technical Hard Constraints: Section 205 “Mature Blockchain” Determination Criteria

Section 205 of the bill is the “logical anchor” of the entire legislation, replacing the highly controversial Howey test with measurable indicators.

1. Penetration Analysis of the 20% Control Threshold

The revised draft stipulates that a system must demonstrate the following power distribution indicators over the past 12 months to be recognized as “digital commodities” under CFTC jurisdiction:

• Governance Concentration: The combined voting rights held by the issuer, related parties, and concerted actors must not exceed 20%.
• Code Control: No entity should possess “Unilateral Authority” to substantially change the protocol logic.

Expert Opinion: This clause imposes significant audit pressure on VASPs’ asset repositories. When conducting KYA (Know Your Asset), VASPs cannot rely solely on whitepaper descriptions but must have “governance penetration” capabilities. If a Layer 2 protocol or DeFi application’s founding team holds key governance rights via multisig (Multisig), even with dispersed token distribution, it could legally be classified as a “non-mature system,” and thus considered a security.

2. Independent Verification of Source Code and Transaction History

The draft requires mature systems to have “publicly available source code” and “independently verifiable complete history.” This means any private chain lacking transparency or with strong administrative control, after 2026, will find it extremely difficult to gain entry to mainstream compliant exchanges.

3. Institutionalization of Stablecoin Responsibilities: Section 512 and Transition to Higher Audit Levels

For “Permitted Payment Stablecoins,” the bill establishes a regulatory fortress comparable to traditional banking.

1. From “Attestation” to “Examination”

Section 512(2)(A) clearly states that issuers must submit “Examination”-level financial reports monthly.

• Analytical Rigor: In professional audit terms, Examination represents the highest level of assurance. It requires auditors to directly penetrate underlying reserve assets (such as government bonds or cash reserves), rather than merely verifying the issuer’s reports.

2. Loss of Criminal Immunity for Executives

The draft proposes to introduce 18 U.S.C. 1350©, requiring CEOs and CFOs to confirm the truthfulness of monthly reports. If concealment of reserve shortages is discovered, senior executives could face federal criminal charges. This “personal responsibility” mechanism aims to end the phenomena of algorithmic de-pegging and reserve fraud in the stablecoin sector.

4. Legal Formalization of KYT: Section 110 and Mandatory Integration with the Bank Secrecy Act

Amendments to the Bank Secrecy Act (BSA) (BSA) 31 U.S.C. 5312 represent the most substantive “legal endorsement” of technical compliance tools to date.

1. Legalization of “Appropriate Analysis Tools”

The draft explicitly requires digital commodity brokers and exchanges to use:

“……Appropriate Distributed Ledger Analytics (Appropriate Distributed Ledger Analytics) to monitor and report suspicious activities.”

Compliance Practical Analysis: This wording elevates “on-chain analysis software” from a cost item to a compliance requirement. Failure to integrate analysis tools recognized by federal standards will be regarded as BSA compliance deficiency, directly affecting VASP registration status.

2. The Game Between Self-Custody Wallet Protection and Anti-Money Laundering Monitoring

Section 105© clearly protects the rights of U.S. individuals to own self-custody wallets and P2P transactions.

• Challenge: While laws prohibit regulators from restricting personal use of hardware wallets, they also require VASPs to identify illegal flows. This forces KYT logic to evolve from “address label matching” to “Multi-hop Behavioral Topology Analysis.” VASPs need to demonstrate, without infringing on privacy red lines, that deposit funds have not passed through illegal mixers or sanctioned entities.

5. Legislative Recommendations and Industry Conclusions

Based on our review of the Senate draft of H.R.3633, we conclude:

1. Jurisdictional Prejudgment: Asset classification has shifted from “qualitative narrative” to “quantitative features.” VASPs must establish an automated compliance review process based on Sec. 205 standards.
2. Upgrade of Compliance Infrastructure: Entities with only basic KYC capabilities will be unable to meet the mandatory requirements of Section 110. Building technical infrastructure capable of identifying “cross-chain jumps” and “attribution analysis” is urgent.
3. Compatibility with Self-Custody Rights: VASPs must reassess their self-custody wallet policies to ensure their risk control logic, while protecting citizens’ rights under Sec. 105©, can enable real-time interception of high-risk assets.

6. Practical Application of Technical Tools: Case of TrustIn

Under the new “quantitative regulation” order established by H.R.3633, technical tools play a core role in bridging the gap between legal provisions and practical implementation. Although the bill is not yet finalized, its direction of “technical compliance” is very clear.

Regarding the above provisions, TrustIn, as a compliance infrastructure for stablecoin on-chain activities, can provide VASP with the following practical technical support:

1. Entity Relationship Penetration (KYA Pro) for Section 205

The bill sets a 20% control threshold for “mature systems,” requiring VASPs to have deep audit capabilities to identify “related entities.”

• Technical Benchmark: TrustIn’s KYA Pro (Institutional Deep Due Diligence) module offers configurable 3-5-9 layer multi-level penetration analysis. Its “white-box” engine allows compliance teams to penetrate surface addresses and deeply explore entity relationships behind different addresses. This helps VASPs accurately assess the actual governance concentration of assets to be launched, determine whether the issuer and related parties hold more than 20%, and provide concrete entity relationship evidence for CFTC maturity certification.

2. Dynamic Defense of Reserve Addresses (Monitoring) for Section 512

The bill requires stablecoin issuers to conduct monthly “Examination” audits and imposes criminal liability on senior executives, demanding real-time awareness of underlying risks.

• Technical Benchmark: TrustIn’s Monitoring (Continuous Risk Radar) module offers 24/7 dynamic defense. Using its “anti-pollution” mechanism, VASPs can continuously scan core reserve addresses related to stablecoins. If interactions with sanctioned entities are detected, the system issues real-time risk alerts and isolates risks. This not only compensates for the “time gap” of monthly audits but also provides transparent audit trails through “white-box” records, meeting the bill’s strict compliance record requirements.

3. Complex Link Restoration (TraceForce) for Section 110

The bill mandates the use of “appropriate analysis tools” to monitor suspicious activities (SAR), especially in environments with active P2P and self-custody wallets, where link tracing accuracy is critical.

• Technical Benchmark: To meet the legal requirements for “distributed ledger analysis,” TrustIn’s TraceForce (Law Enforcement Grade Fund Tracing) module demonstrates core competitiveness. It focuses on penetrating mixing protocols and cross-chain technologies, visualizing complex fund flows, especially filling data intelligence gaps in Asia and the Middle East. Through TraceForce’s case snapshots and team collaboration features, VASPs can efficiently collect evidence on P2P deposit funds under Sec. 105©, ensuring the identification of money laundering risks and providing compliant suspicious activity evidence supporting federal law enforcement.

Conclusion

H.R.3633 is not the final regulation for digital assets, but it has already established a clear technological main theme for 2026: Decentralized Quantitative Monitoring, Penetration Auditing of Stablecoins, and the Legal Status of On-Chain Analysis Tools.

Disclaimer: This report is based on the publicly available draft legislation and amendments as of January 14, 2026. Since the bill is still under review, final provisions may be slightly adjusted during voting. The technical applications mentioned herein are for VASP compliance reference only and do not constitute official endorsement or legal advice.

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