House Democrats expressed concerns about the CLARITY Act during a recent minority day hearing. This proposed legislation aims to create a legal framework for the trading of most crypto assets, explicitly exempting many from the Securities and Exchange Commission's oversight. Experts, including Amanda Fischer from Better Markets, argue that the bill presents loopholes that could enable traditional finance (TradFi) firms to evade regulation while benefiting from cost savings associated with operating on blockchain networks. Fischer highlighted that the Act would likely encourage firms to shift standard practices onto more advantageous blockchain solutions, thereby undermining decades of U.S. securities law. The discussion also points out the bill's unclear categorization of crypto tokens and the likelihood that issuers will prefer the less regulated options offered under the law. The hearing, crucially, showcased the Democrats' attempt to shed light on the potential impacts of this legislation, amidst critiques over the perceived lack of accountability it introduces into the market.

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