House Democrats expressed concerns during a hearing regarding the CLARITY Act, a proposed framework for regulating digital assets in the U.S. This legislation raises alarms among experts, as it could create loopholes allowing traditional finance firms to bypass regulations by leveraging blockchain technology. Witnesses, including Amanda Fischer from Better Markets, highlighted that the bill’s regulatory gaps could incentivize financial institutions to mimic traditional capital-raising functions on blockchain platforms to evade compliance costs. The CLARITY Act aims to classify most crypto tokens as ‘digital commodities,’ exempting them from SEC oversight. Critics argue that this classification encourages token issuers to avoid more stringent registration requirements with the SEC. The bill has drawn attention, not only for its implications on cryptocurrency but also for its potential to reshape traditional securities markets. The hearing notably contrasted the viewpoints of Democrats and Republicans, with the former focusing on regulatory concerns and the latter defending the legislation.

Source 🔗