The crypto industry raises concerns over the CLARITY Act’s “Gensler-era” provision, which removes token exemptions, giving the SEC broad authority.
A provision in the CLARITY Act has been the subject of criticism from crypto stakeholders before the markup phase, which is currently underway. These industry actors observed that the provision is associated with the Gensler-led administration and creates uncertainty contrary to the bill’s objectives.
Crypto Stakeholders Criticize Provision in CLARITY Act
Journalist Eleanor Terrett disclosed in an X post that certain industry professionals with whom she has had conversations are expressing apprehension regarding a new section in the amended version of the bill. These industry actors have even gone so far as to refer to this section as a “Gensler-era” provision.
This occurs before the CLARITY Act’s markup phase, which commences today. The US House Financial Services Committee had scheduled the review process for June 10. The provisions of the CLARITY Act will be reviewed by members of the Committee and the House Committee on Agriculture at the Rayburn House Office Building.
The new section would eradicate exceptions for previously issued tokens, as these crypto stakeholders noted in response to their concerns. Instead, it would not grant the SEC the authority to determine which tokens qualify as securities individually. These critics contend that this method reintroduces the uncertainty the measure intends to resolve.
Additionally, the Himman report, in which the former SEC Director declared that ETH was not a security, could pose a similar issue with the section in the CLARITY Act. Simultaneously, the Commission filed a lawsuit against Ripple, asserting that XRP was a security.
SEC Chair Paul Atkins recently expressed his endorsement of crypto self-custody and DeFi activities in response to the censure of this section in the bill. Atkins also disclosed that the Commission is developing a conditional exemptive relief framework for DeFi platforms.
In the interim, eight crypto firms, including Uniswap, have expressed their endorsement of the inclusion of the Blockchain Regulatory Certainty Act (BRCA) in the CLARITY Act. The BRCA safeguards creators of non-custodial blockchain technology.
