Crypto Market Sees Surge in Growth as CLARITY Act Fails in Senate

Following the failure of the CLARITY Act in the Senate, the cryptocurrency market saw a surge in growth. Bitwise Asset Management's chief investment officer, Matt Hougan, attributed this to the faster regulatory action and fewer proposed business restrictions. Hougan noted that the industry had accepted restrictions in exchange for lasting legal certainty, but warned that agency decisions offer less protection against political change than legislation. He also pointed out that a new administration could appoint SEC and CFTC leaders who take a tougher approach.

According to Hougan, the CLARITY Act's setback benefited various sectors in the crypto market. Stablecoin platforms, such as Coinbase, retained room to offer balance rewards, while established exchanges preserved their business advantages. Tokenized stock venues gained a five-year testing route, and token buyback guidance carries conditions. Hougan highlighted that token buybacks gained guidance after the CLARITY Act setback, with notable gains for tokens such as NEAR (104%), Uniswap (49%), and Pump (19%).

Hougan also noted that the SEC's Division of Corporation Finance addressed repurchase announcements in FAQs, specifying that a non-security token's network must be functional and have no central party. The FAQs express staff views, have no legal force, and do not change existing law.

In addition, Hougan identified Securitize as a beneficiary of the CLARITY Act's failure, citing its tokenization work for major financial institutions such as BlackRock, Apollo, and KKR. He also mentioned that the SEC's exemption for qualifying tokenized U.S. stocks can trade through permissioned automated market makers and liquidity pools.