House Democrats held a hearing to discuss the CLARITY Act, a proposed legislation aimed at regulating the crypto market in the U.S. Experts expressed concerns that the bill creates loopholes allowing traditional finance firms to evade regulations. Amanda Fischer from Better Markets highlighted that the Act's regulatory gaps could encourage financial institutions to shift operations to blockchain to avoid traditional securities laws, which could lead to a substantial reduction in compliance costs. The bill categorizes most crypto assets as 'digital commodities,' exempting them from SEC oversight. Democrats raised concerns over the implications of this framework, fearing it might undermine existing securities regulations that have protected investors since the 1930s. Furthermore, there were criticisms regarding the focus of Republican lawmakers on unrelated political topics instead of addressing the bill's substantive issues. The hearings mark a notable divergence from previous discussions led by the Republican majority, emphasizing the need for careful scrutiny of the proposed legislation's broader impacts.

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