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?
OK, the Clarity Act is dead (at least for now). Most crypto enthusiasts had a sense that this was a big bummer for the sector. But how many knew what the legislation actually did?
The Digital Asset Market Clarity Act was Congress' umpteenth version of a similar concept that's made the rounds for years: to define the different kinds of cryptocurrencies and related assets, and say exactly which regulators have power over them.
For much of the industry's history in the U.S., it battled with agencies such as the U.S. Securities and Exchange Commission over what platforms like Coinbase and Kraken were allowed to do and whether issuing crypto was legally the same as launching a security. It got heated, and there were a lot of enforcement actions, expensive settlements and drama, much of it starring former SEC Chair Gary Gensler. (Pausing for crypto insiders to boo and hiss.)
"The Republican leadership at those agencies will be able to pass regulations without Democratic approval," he wrote in a note to clients after Clarity failed. "Some of those proposals may come with an implied message to Democrats amounting to: This is what you get when you don’t legislate."