Clarity Act, we hardly knew ye: We look at what was in the bill and what’s replacing it
U.S. agencies are racing to substitute their regulations for the law that was meant to set crypto markets in governmental bedrock, but will the stand-ins last?
- It didn’t take long for the U.S. markets regulators to try to fill in for a failed Clarity Act, though the efforts at the Securities and Exchange Commission and Commodity Futures Trading Commission may not be a perfect substitute.
- SEC Chairman Paul Atkins has said himself — a lot — that his agency needed a law to back up its work, and it didn’t get one.
This conflict is uniquely American, because the U.S.’ regulatory regime developed completely separate securities and derivatives agencies, unlike the unification elsewhere. (Yes, everybody knows it’s unnecessarily complicated.) So figuring out which one is responsible for each asset has been a minefield from day one.
Defining the different buckets of blockchain-native assets and who would regulate them was a core aspect of Clarity. Plus, the bill did a lot of things meant to curb illicit finance. And — in a particularly contentious arena — it sought to offer limited legal protections to software developers in decentralized finance (DeFi), so they wouldn’t get prosecuted for how other people use their work.
We’ll pass on talking about the sections that actually killed the bill, which had very little to do with the legislation’s primary business. Instead, we’ll look at what happens in the Clarity-shaped hole in U.S. policy. And thanks to the SEC, we didn’t have to wait long.
