CLARITY Act Criticized Over Regulatory Loopholes and Weak Investor Protections

The Digital Asset Market CLARITY Act is facing criticism from ethics watchdogs and former regulators over regulatory loopholes, weak conflict-of-interest safeguards, and inadequate investor protections.

Critics argue that the bill would grandfather existing crypto holdings, allow loyalty rewards, and shift oversight of a $2.2T market to an understaffed CFTC.

Watchdogs are demanding full divestment, closed loopholes, and stronger rules before the Senate floor vote, raising regulatory risk for crypto adoption, DeFi, DEX/CEX operations, and token markets.