CLARITY Act Failure Puts Crypto Regulation Back in Regulators' Hands
A bill aimed at clarifying crypto regulations in the US has stalled in the Senate, handing responsibility back to the SEC and CFTC. The CLARITY Act failed to clear a procedural vote on September 15, causing prices of crypto-linked assets to plummet. Coinbase fell by 10%, Circle dropped over 11%, and Bitcoin slipped below $75,000.
Analysts warn that regulatory uncertainty may delay acquisitions in the crypto space, including those by traditional financial firms expanding into new US businesses. Companies considering large acquisitions want a clearer regulatory framework, but the SEC and CFTC could provide this through their own rules, which would take time to develop.
The bill's failure has cast doubt on the durability of the current pro-crypto regulatory push, which eased regulations under the Trump administration but remains susceptible to future changes. Regulators can still write rules, but those offer less stability and permanence than legislation.