Molly White (@molly0xfff@hachyderm.io)

9d

The crypto industry is trying to ram through the CLARITY Act, a flawed market structure bill that reads like it was written by industry lobbyists.

#crypto #cryptocurrency #USpolitics #USpol

Someone (read: the crypto industry) also lit a fire under the ass of Congresspeople working on the crypto market structure bill, which has since received one of those kitschy acronyms Congress can’t seem to resist. Now known as the CLARITY Act, the bill seeks to establish a joint regulatory environment between the SEC and CFTC, carving out something called an “investment contract asset” to exempt some kinds of crypto assets from securities regulations. It’s a complex and convoluted bill, and it’s pretty clear to me from reading it that it was written by industry lobbyists. I don’t actually think, at least as drafted, that it’s likely to introduce that much in the way of “clarity” to crypto regulation: there are still weird and vague definitions that would still seem to require the same kinds of securities analyses that the industry has been trying to sidestep. However, the bill’s authors may be relying on the fact that, at least for now, the SEC doesn’t seem terribly interested in crypto enforcement.

The CLARITY Act also introduces a poorly defined concept of a “mature blockchain system”, which seems to be the evolution of FIT21’s “decentralized system” evaluations. However, under the bill, blockchain system developers need merely state that they “intend” to become a mature blockchain and they’re granted four years and allowed to raise up to $75 million without significant scrutiny. One need only take the briefest glance at Web3 is Going

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The bill is on a rocket schedule, with a hearing already held on June 4 and markup scheduled for June 10. The June 4 hearing featured as witnesses two crypto-friendly former regulators, and two members of the crypto industry.20 Ranking Member of the House Financial Services Committee Maxine Waters subsequently requested a Minority Day Hearing with a panel of witnesses selected by Democrats, which she said would discuss “President Trump’s crypto conflicts of interest and corruption...; the effects of H.R. 3633, the Digital Asset Market Clarity (CLARITY) Act of 2025, on consumer and investor protection, national security, and existing securities and commodity futures regulation; and the potential effects of the proposed legislation on the digital asset industry and broader financial system.”21

The speed at which this bill is being pushed through is perhaps not surprising given the attention to crypto industry desires from the top echelons of government, and concern that changes need to happen fast while there’s enough concentration of power to force them through. JD Vance, speaking at the Bitcoin 2025 conference on May 28, was blunt: “I hope that our party is in charge for a long time, but nothing is ever guaranteed in politics. So the best way to ensure that crypto is part of the mainstream economy is through a market structure bill that champions and doesn’t restrict the extraordinary value that bitcoin and other digital assets represent.”22

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9d

SEC Commissioner Caroline Crenshaw is warning of “regulatory Jenga” that “feels all too familiar to those of who have lived through 2008”.

#crypto #cryptocurrency #USpolitics #USpol

Commissioner Crenshaw issued her own statement on the SEC’s about-face, writing that it was “yet another example of the SEC’s ongoing ‘fake it till we make it’ approach to crypto.” Those remarks echo her speech earlier in the month, where she warned:

My remarks today offer a word of caution as the agency chips away at decades of our own work – and, at the same time, as we stare down alarming market volatility, emerging risks, and calls for deregulatory action in all corners of our markets.

As we careen down this path full speed, it almost feels like we’re playing a game of regulatory Jenga. Our proverbial Jenga tower is made up of a set of discrete but interrelated rules and laws, deeply and carefully developed over the years, and implemented by a strong agency of experts, skilled in overseeing and regulating our increasingly complex markets.

Of course, in Jenga, the tower remains standing when you pull out a block or two here and there. But, how many blocks can you pull before the tower gives way? When it comes to the stability of our markets, how far are we willing to take our dangerous game? Who would ultimately be the loser when the foundation gives way? I worry, as we all should, that those losing the most won’t be the influential, monied interests; rather, it will be the Main Street Americans – the investors and small business owners who can least afford the greatest loss.

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She then went on to outline the agency’s recent actions to push out experienced staff, statements that “dilute or effectively rescind” securities laws, failures to enforce securities laws, and choices to ignore significant risks in crypto and other portions of the market. She concludes: “This is a dangerous game. We are pulling apart our own regulatory foundation – block by block, case by case, and rule by rule. It feels all too familiar to those of who have lived through 2008.”27

Crenshaw’s concerns certainly haven’t slowed down the agency any, though. After submitting a joint filing quickly after Trump’s inauguration to stay the ongoing enforcement case against Binance [I77], the SEC has now submitted a joint stipulation to dismiss the case with prejudice.28 The SEC says they have decided as an “exercise of its discretion and as a policy matter” to dismiss the case, which features a written statement from a Binance Chief Compliance Officer that “we are operating as a fking unlicensed securities exchange in the USA bro” and evidence that Binance was not just violating securities laws pertaining to registration but was also committing fraud. A week before the dismissal, Binance listed World Liberty Financial’s USD1 stablecoin for trading on their platform. Trump owns a 60% stake in World Liberty, and receives a substantial share of token and protocol revenues. The stablecoin has also been used to facilitate a $2 billion investment from the Emirati MGX investment firm into

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9d

All this plus Circle’s IPO, the Department of Labor’s rescission of guidance around crypto in 401(k)s, another crypto kidnapping, fifteen lawsuits against Coinbase, and even more in this recap issue of Citation Needed.

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