During a recent hearing, House Democrats raised concerns regarding the CLARITY Act, a legislative proposal aimed at regulating cryptocurrency and digital assets in the United States. Critics highlighted potential loopholes that could allow traditional financial institutions to bypass existing regulations, thereby incentivizing them to adopt blockchain technologies to reduce costs and evade regulatory scrutiny. Amanda Fischer, Policy Director at Better Markets, expressed that the bill, by exempting certain crypto assets from SEC oversight, would have ramifications extending beyond just the crypto sector, allowing firms to misclassify offerings to avoid compliance. The Democrats' hearing aimed to address these issues, amidst a partisan divide regarding the implications of the legislation and its balance with necessary regulations for investor protection.

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