The U.S. Securities and Exchange Commission (SEC) has stated that it is prepared to formulate its own crypto rules if Congress fails to pass the CLARITY Act. Amid this political stalemate, SEC Chair Paul Atkins urged the Senate to quickly pass the bill before the summer recess scheduled to begin after August 7.
The CLARITY Act had previously sailed smoothly through the House of Representatives. The bill secured a 294-134 bipartisan vote, combining 216 Republicans and 78 Democrats. It also cleared the Senate Banking Committee 15-9 this past May. The issue is that a Senate floor vote still requires at least eight additional Democratic votes to move forward.
Chances of near-term passage are narrowing after Senate Majority Leader John Thune prioritized federal nominations and a Russia-Iran sanctions bill. Representative Mike Haridopolos, a Republican from Florida, warned that U.S. crypto leadership risks falling behind if the delay continues.
Two Provisions Sparking Opposition
Democrats take issue with two main provisions in the CLARITY Act draft. First, a ban on elected officials - including the president - from issuing crypto assets until January 2029. Second, a restriction barring state attorneys general from taking legal action if the Department of Justice (DOJ) declines to open a case.
The second provision has triggered fierce resistance from local law enforcement. New York Attorney General Letitia James voiced concern that the rule would eliminate state authority and weaken defenses against crypto fraud. On the other side, an array of industry backers ranging from Coinbase, Ripple, and the Digital Chamber to Goldman Sachs CEO David Solomon continue pushing for passage. The Consumer Technology Association, the largest tech trade group in the United States, has also pressured the Senate to bring the bill to the floor immediately.
Racing Against the Summer Recess
Amid the ongoing negotiations, Senators Ruben Gallego and Thom Tillis are still working against the clock. Both are finalizing a counterproposal on bipartisan ethics rules in the CLARITY Act draft, aiming to send the document to the White House desk within the next few days.
The stakes are clear. If lawmakers fail to reach common ground before the end of the current congressional session, all prolonged discussions on the CLARITY Act could be pushed back to 2027, forcing the industry to start the process over from scratch.
The ball is now in the Senate’s court. The choice is either to reach a consensus within days or step back and let the SEC take over rulemaking for the crypto industry as it sees fit.
Reported by @WatcherGuru on X.
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
