U.S. Crypto Market Structure Bill Advances with Bipartisan House Support

TLDR

Table of Contents

House Agriculture Committee approves Digital Asset Market Clarity Act, advancing with bipartisan support 47-6 vote.
Bill aims to fill gaps in crypto regulations, balancing innovation and consumer protection.
SEC gains authority to classify tokens as securities, raising concerns about market uncertainty.
Blockchain Regulatory Certainty Act offers legal protection for developers of non-custodial blockchain technologies.

The U.S. House of Representatives has made significant progress on the Digital Asset Market Clarity Act, a bill designed to provide clear regulatory guidelines for the cryptocurrency market. This legislation moved forward with strong bipartisan backing, as the House Agriculture Committee voted 47-6 to advance it. The bill aims to address key issues surrounding digital assets and offer a regulatory framework that supports both innovation and consumer protection.

Agriculture Committee Approves Market Structure Bill

On June 10, the House Agriculture Committee approved the crypto market structure bill, known as the Clarity Act. The committee’s decision was a clear signal of bipartisan support, with a vote of 47-6 in favor of advancing the legislation. Committee Chairman Glenn “GT” Thompson emphasized that the bill would provide much-needed certainty for the digital asset market, helping market participants to navigate the regulatory landscape.

Thompson stated, “The Clarity Act provides certainty on digital assets to market participants, fills regulatory gaps at the Commodity Futures Trading Commission and the Securities and Exchange Commission, and bolsters American innovation.” He also highlighted that the bill aims to bring consumer protections to digital asset activities and intermediaries, which are essential as millions of Americans continue to engage with cryptocurrencies.

Despite the bipartisan support, Representative Angie Craig, the committee’s ranking Democrat, acknowledged that the bill was not perfect. She stressed the importance of enacting legislation to address the growing use of cryptocurrencies, noting that without proper regulation, retail investors would lack the protections available in other areas of the financial system.

House Financial Services Committee Continues Debate

While the Agriculture Committee voted to advance the Market Structure Bill, the House Financial Services Committee continued its discussions on the legislation. This committee is also critical in shaping the bill’s progress, as it oversees aspects of crypto market activity related to securities.

Representative David Scott, a Democrat who serves on both committees, expressed concerns that the bill could allow crypto firms to bypass adequate oversight. He argued that the bill does not sufficiently fund the Commodity Futures Trading Commission (CFTC), the body designated to oversee digital commodities. Scott emphasized that the CFTC is not equipped to handle retail-facing investment products, raising concerns about potential risks for investors.

As of June 10, members of the Financial Services Committee were still working through amendments to address these issues. The outcome of these discussions will be crucial, as both committees’ work will need to be merged into a unified report before the legislation proceeds to the full House.

Crypto Industry Concerns Over Market Structure Bill

The Clarity Act has also raised concerns within the crypto industry, particularly regarding a new section that grants the U.S. Securities and Exchange Commission (SEC) the authority to determine on an individual basis which tokens classify as securities. This provision has been criticized by some industry players, who argue that it reintroduces uncertainty into the market, contrary to the bill’s primary goal of providing clarity.

The provision has been described as a “Gensler-era” measure, referring to SEC Chairman Gary Gensler’s leadership and approach to crypto regulation.

Critics as a result worry that this could lead to inconsistent or overly broad determinations about which digital assets fall under SEC jurisdiction. Some stakeholders argue that it may also impact the legal status of tokens like Ethereum (ETH) and XRP, which have faced regulatory scrutiny in the past.

However, despite these concerns, the crypto community has rallied behind the addition of the Blockchain Regulatory Certainty Act (BRCA) within the Clarity Act. The BRCA would protect developers of non-custodial blockchain technologies, offering legal certainty for creators who are not directly involved in handling consumer funds.

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