Clarity Bill Likely Dead as Democrats Seek Rewrite

The Clarity Bill is probably a non-starter for the time being. The proposal to put in place some regulation of cryptocurrencies is likely to be shelved as Democrats set about reworking the legislation, leaving the crypto world with its share of uncertainty over what is to come.

Democrats Push for Stricter Crypto Regulation

On the most recent Unchained, one can hear why the bill will not be making it through Congress in this lame duck session. Put forward to give the industry unambiguous regulatory direction, the Clarity Bill has run up against headwinds from Democrats who are not happy with the way the matter has been handled.

There is a sense among the party that they were put on the sidelines during prior talks, and so they have put their foot down to rewrite the Clarity Bill along with such things as the Baja Parmening Bill. What they want to see are stricter regulations, in keeping with a wider impulse in the party to have more control over a sector that is changing rapidly.

House Financial Services Committee Drafts New Crypto Framework

For its part, the House Financial Services Committee is putting together legislation of its own to address the structure of the crypto market, a change of tack by lawmakers to fill any gaps left by bills that have come to a standstill, the host of Unchained points out.

Tougher DeFi Rules and Jurisdictional Shifts

The framework that is taking shape will impose strict ethics rules on government officials regarding their ownership of crypto assets or ties to crypto firms, a tightening meant to forestall any impropriety or conflict of interest. DeFi is also in the crosshairs of the new draft; compliance will be made more onerous for projects with calls for independent audits and 24-hour limits on rewards payments.

Then there is the question of having the SEC, rather than the CFTC, oversee the bulk of the industry. A source of much contention, the proposed transfer of jurisdiction could well alter the playing field for investors and crypto companies alike.