A revised draft of the CLARITY Act, now including a controversial provision termed the ‘Gensler-era clause’, has sparked backlash within the digital asset industry for potentially reintroducing the very regulatory uncertainty it was designed to resolve.
The U.S. House Financial Services Committee and Agriculture Committee recently advanced discussions concerning the Act. The latest draft legislation notably eliminates exemptions for existing digital tokens.
Furthermore, it explicitly grants the Securities and Exchange Commission (SEC) authority to evaluate each digital asset individually to determine if it meets the legal definition of a security.
The ‘Gensler-era clause’ is understood to reference the regulatory philosophy of former SEC Chair Gary Gensler, emphasizing case-by-case application of existing securities laws to digital assets instead of providing comprehensive, clear regulatory frameworks.
Industry stakeholders and legal experts contend that this change undermines the CLARITY Act’s core objective of providing certainty. Instead, they warn it places a persistent burden of uncertainty upon market participants, forcing them to navigate complex regulatory determinations for each asset.
Market participants are closely monitoring the bill’s progression, recognizing its profound potential impact on both current token projects and future strategies for token issuance and compliance.