Failing to pass the crypto market structure bill known as the CLARITY Act could leave the door open for a less industry-friendly future US government to crack down on crypto, according to Coin Center executive director Peter Van Valkenburgh.
In an X post on Friday, Van Valkenburgh argued that rejecting developer protections in legislation like the CLARITY Act and the Blockchain Regulatory Certainty Act in favor of “short-term business interests” and the “continued goodwill of those in charge” could lead to a “grim” future for the industry.
“The point of passing CLARITY is not to trust this administration. It is to bind the next one,” he said, adding that “A world without CLARITY’s statutory protections for developers is a world governed by prosecutorial discretion, political fashion, and fear.”
The CLARITY Act stalled in the Senate after banks, crypto firms, and lawmakers failed to agree on key provisions — including whether to allow stablecoin yields. The bill covers a range of measures, including frameworks for registering crypto intermediaries, regulating digital assets and classifying tokens.
During the previous US administration, former SEC Chair Gary Gensler drew criticism from parts of the crypto industry for allegedly crafting policy through enforcement actions and legal settlements with crypto firms rather than formal rulemaking.
Nothing set in stone without legislation
Van Valkenburgh also predicts that, without legislative clarification, a future administration’s Department of Justice could ramp up prosecutions of privacy-tool developers as unlicensed money transmitters, and that existing regulatory interpretive guidance could be revoked.
Related: Crypto investor sentiment will rise once CLARITY Act is passed: Bessent
Since Gensler resigned on Jan. 20, 2025, crypto proponents have seen a regulatory shift by the SEC, including the dismissal of several long-running enforcement actions against crypto firms and friendlier guidance on how the agency will treat crypto.
“If we lose this moment because we thought we’d have a bit more revenue and a bit more latitude under the short-term friendly discretion of the current administration, then we lose our way,” Van Valkenburgh said.
“We fail to stand up for the kind of transparency, neutrality, and openness that crypto stands for. And worse, we will have helped tie the noose ourselves, handing it to the future officials who will be only too happy to pull it tight.”
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