Coin Center: If the CLARITY Act does not pass, the U.S. government may strengthen cryptocurrency regulation in the future

According to the US Department of Justice, Coin Center Executive Director Peter Van Valkenburgh stated that if the CLARITY Act, which pertains to the structure of the cryptocurrency market, fails to pass, a future unfriendly U.S. government may again intensify regulation of the crypto industry. If the protections for developers in the CLARITY Act and the Blockchain Regulatory Certainty Act are rejected, prioritizing short-term business interests and the current regulatory environment, the industry may face adverse situations. Peter Van Valkenburgh indicated that the purpose of the CLARITY Act is to legally bind future governments rather than rely on the current government’s stance; without relevant legal protections, the crypto industry could be affected by law enforcement discretion, policy changes, and uncertainty. He disclosed that the CLARITY Act has been stalled in the Senate due to a lack of consensus among banks, crypto companies, and legislators on key terms, including whether to allow stablecoin yields. The bill covers aspects such as the registration framework for crypto intermediaries, regulation of digital assets, and token classification. Furthermore, in the absence of legislative clarity, future government agencies may increase law enforcement against privacy tool developers, viewing them as unregistered money transmitters, while existing regulatory interpretive guidelines may also be rescinded. Former SEC Chairman Gary Gensler has faced criticism from the industry for promoting policy through enforcement actions and settlements with crypto companies, rather than through formal rulemaking. Since he left office on January 20, 2025, the SEC has withdrawn multiple long-standing enforcement cases against crypto companies and issued more lenient regulatory guidelines.