Sen. Warren Warns CLARITY Bill Could Enable Regulatory Arbitrage for Major Corporations

Senator Elizabeth Warren has raised urgent concerns about potential loopholes in the proposed CLARITY Act, warning it could allow publicly traded giants like Meta and Tesla to circumvent SEC oversight through tokenization. The legislation, scheduled for a House vote next week, might permit companies to reclassify traditional securities as blockchain-based tokens—effectively removing them from existing investor protection frameworks.

During a Senate Banking Committee hearing on crypto market structure, Warren emphasized the existential threat to securities laws. "A publicly-traded company like Meta or Tesla could simply decide to put its stock on the blockchain and POOF! it would escape all SEC regulation," she stated, highlighting risks to financial disclosures and market transparency.

The debate coincides with Warren's broader campaign against regulatory exceptions for digital assets. Separately, she's targeted political corruption channels, recently accusing former President Trump of leveraging office to enrich billionaires—though her remarks about presidential crypto channels were truncated in the released statement.