Crypto's Regulatory Hurdle Keeps Rolling Back

Crypto's regulatory struggles continue, with the Senate's failure to advance the Digital Asset Market Clarity Act (Clarity Act) being the latest setback. The 635-page bill aimed to establish a framework for market structure, licensing firms trading crypto tokens, and determining supervisory authority between the Securities and Exchange Commission and the Commodity Futures Trading Commission.

The bill's defeat is particularly frustrating, as the hardest part of the regulatory process was already complete. A broad coalition, including Wall Street and the crypto industry, had come together in support of the bill. Firms like Goldman Sachs and BlackRock had also endorsed the Clarity Act.

The bill's sponsors, including Senators Cynthia Lummis and Thom Tillis, will not be returning to the Senate in the next Congress, effectively resetting progress. The need for a comprehensive regulatory framework has been understood by Congress for years, with legislative efforts dating back to the Token Taxonomy Act of 2018.