House Democrats raised concerns during a hearing about the CLARITY Act, which aims to regulate the crypto industry. Experts highlighted potential loopholes allowing traditional financial institutions to bypass regulations. Amanda Fischer, Policy Director at Better Markets, warned that excluding most crypto assets from SEC oversight could prompt firms to exploit blockchain technology to evade legal requirements, pointing to Robinhood's interest in tokenizing assets for cost efficiency. The hearing also critiqued the bill's framework categorizing most crypto assets as 'digital commodities,' thereby exempting them from SEC regulations. Concerns extended to decentralized finance (DeFi) markets, which the bill does not adequately address. Key Democratic members expressed apprehension about the bill's approach, particularly regarding its provisions that could enable widespread non-compliance while failing to address regulations that protect investors.

Source 🔗