House Democrats expressed concerns about the CLARITY Act during a recent minority day hearing, highlighting the potential regulatory loopholes that might allow traditional finance firms to evade oversight. This legislation seeks to create a legal framework for most crypto assets, explicitly exempting many from SEC regulation. Activists, including Amanda Fischer from Better Markets, warned of the potential impacts, asserting that the bill's gaps could lead financial institutions to exploit blockchain technology to bypass established securities laws. They claim it would create unfair competitive advantages, especially as traditional platforms move operations to blockchain to reduce regulatory costs. Additionally, the proposed tiered system for crypto asset classification may encourage issuers to avoid rigorous regulatory pathways by claiming their offerings do not qualify as investment contracts. The hearing also reflected partisan tensions, with some lawmakers questioning the focus on Trump-related amendments rather than substantive legislative concerns.

Source 🔗