Crypto Regulation: The Act That Will Change Everything (Or Not!)

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In a galaxy not so far away, the buzz surrounding the CLARITY Act has reached a fever pitch, much like a Vogon poetry reading. This proposed framework for US crypto regulation is set to have its first markup tomorrow morning, which is either a monumental event or just another Tuesday. Who can tell? 🤔

But what, you may ask, is the significance of this new crypto bill, and which industry players are waving their flags in support? Spoiler alert: it’s a mixed bag of enthusiasm and confusion!

New Act Brings CLARITY To Crypto Regulation

Since the GENIUS Act managed to clear a key cloture vote (which sounds like a fancy term for “we finally agreed on something”), US crypto policy has become the talk of the town. In late May, GOP Congressman French Hill, who may or may not have a cape, proposed the Digital Asset Market Clarity (CLARITY) Act, a new framework for Web3 regulation. 🦸‍♂️

The bill’s first markup is scheduled for tomorrow morning at 10 AM EST, which is when the real fun begins!

NEW: @FinancialCmte has officially scheduled a markup of the crypto market structure bill — the CLARITY Act — for Tuesday, June 10 at 10:00 AM EST alongside a handful of other bills.

Prepare for a marathon markup sesh! 🏃‍♂️💨

— Eleanor Terrett (@EleanorTerrett) June 5, 2025

The proposed act assigns the CFTC as the primary regulator for digital commodities (on-chain tokens), which sounds like a fancy way of saying they’ll be in charge of the digital lemonade stand. 🍋 It also preserves the SEC’s authority over investment contract assets—securities under the Securities Act, because why not complicate things further?

Overall, it creates precise definitions and compliance pathways to reduce inconsistent enforcement, which is a bit like trying to herd cats. 🐱

In addition to consumer protection measures, it attempts to provide thorough rules for defining tokens as securities or commodities, a thorny issue for regulators who seem to enjoy a good puzzle. 🧩

Without getting into excessive detail (because who has the time?), the bill aims to remove ambiguity from several such situations, which is a noble goal, indeed!

Although it was proposed by a Republican, the CLARITY Act has strong bipartisan support, reflecting the desire to create a solid framework for crypto regulation. Or at least a framework that doesn’t collapse under its own weight.

However, the initial language focused specifically on assets, their classification, and firms that custody them. The proposed bill also exempts “DeFi activities” (like developers and transaction relayers) from conventional registration, which is a relief for those who prefer to operate in the shadows. 🌑

It also explicitly protects peer-to-peer transactions and individual self-custody of assets, because who doesn’t love a good DIY project?

New and Upcoming Amendments

To correct some of the oversight (because who doesn’t love a good oversight?), The Blockchain Regulatory Certainty Act (BRCA) was recently introduced as an amendment to the bill. Presently, the crypto industry’s political lobbying groups are attempting to help it along, like a group of well-meaning but slightly confused friends. 🤷‍♂️

In addition to an initial show of support, eight leading trade associations have made further statements earlier today:

Crypto Image

Specifically, this amendment would ensure that the CLARITY Act doesn’t apply heavy-handed regulations where it isn’t appropriate, which is a bit like saying, “Let’s not use a sledgehammer to crack a nut.” 🥜

However, some regulators may also disagree with this overall ethos. After all, what are laws like this for? Former CFTC Chair Tim Massad, who recently warned of crypto corruption, also testified about some potential pitfalls in the CLARITY Act:

“The CLARITY Act seems to start with the technology and ask, what do we need to do to make it easier for people to invest in this technology? But the strength of our securities and derivatives laws lies in the fact that we have traditionally focused on regulatory goals, and provided…the flexibility to achieve those goals,” Massad claimed.

Similar criticisms have been leveled at a wide range of recent crypto regulations, and the CLARITY Act will likely face more of the same. It’s not yet clear how much this will impact the final bill, but the GENIUS Act underwent substantial amendments from its first version. Between tomorrow’s markup and the voting process, this bill could change dramatically in the next few weeks, much like a chameleon at a disco party. 🦎💃

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2025-06-10 04:44