House Ag Committee Approves CLARITY Act to Regulate Crypto
The U.S. House Agriculture Committee approved the CLARITY Act, substantial legislation to provide an open regulatory framework for digital assets, by a 47-6 bipartisan vote on Tuesday. The move is an important step by Congress to work on regulations for cryptocurrencies, blockchain projects, and digital asset service providers.
Committee Chairman GT Thompson explained the bill would subsequently go to the House floor for debate. Members voting against the bill have through Friday to submit written dissenting opinions. The CLARITY Act has found support from legislators attempting to put an end to confusion about whether digital assets fall under the jurisdiction of the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC).
Key Purposes of the CLARITY Act is to:
- Establish if a digital asset is considered a security or commodity and set the clarity of oversight between the SEC and CFTC.
- Establish a formalized legal infrastructure to allow blockchain innovation while maintaining protection for developers and investors.
- Clarify the law’s status of certain investment products and establish stability in the U.S. cryptocurrency market again.
Sponsors state that the bill gives the certainty needed for U.S.-based digital asset companies to operate free from fear of continual changing regulatory action.
Hot Debate in Financial Services Committee
Meanwhile, the House Financial Services Committee debated a series of prospective amendments to the CLARITY Act. Rep. Maxine Waters specifically offered an amendment aimed at dealing with alleged conflicts of interest surrounding former President Donald Trump’s crypto activities. She offered the possibility of using parts of the bill for personal financial gain.
Rep. Brad Sherman also introduced an amendment that was intended to block future bailouts of the crypto sector. He insisted that language in the bill could be used to pave the way for future government interventions in collapses such as FTX in 2022.
Both amendments were voted down in voice votes.
Developer Protections and Future Oversight
Committee Chairman French Hill presented another amendment that would potentially add legal protections for blockchain developers, shielding them from regulatory danger. Hill was adamant that the bill was to promote consistency, not bail anyone out.
He also clarified that the bill is to address “when is a digital asset a security under SEC jurisdiction or a non-security under CFTC jurisdiction,” a distinction that would potentially redefine American crypto regulation significantly.
What’s Coming Down the Pipe for Crypto Regulation
The CLARITY Act is a step ahead since the Senate soon discusses the GENIUS Act, another bill proposing the regulation of stablecoins. The parallel thrusting of these two bills is proof of growing momentum in Congress to finally establish comprehensive digital asset laws in the United States.
Enacted into law, the CLARITY Act would be a cornerstone in the future of crypto regulation.
