Crypto Heavyweights Torch SEC’s ‘Gensler Clause’ in Fiery CLARITY Act Showdown

Industry titans are drawing battle lines over a controversial provision buried in the landmark crypto legislation—one that reeks of the SEC chair’s regulatory overreach.

‘This isn’t clarity—it’s a Trojan horse,’ snaps a Coinbase exec, as Bitcoin whales quietly reposition ahead of the vote. Meanwhile in DC, lobbyists are trading golf outings for panic-room strategy sessions.

The kicker? The clause could let the SEC retroactively classify tokens as securities—a move that’d make even Wall Street’s most creative accountants blush. Happy regulating!

• Crypto firms reject removal of past token exemptions in new draft
• Stakeholders say provision tied to Gensler’s past SEC enforcement style
• Congress aims to pass CLARITY Act before August deadline

Crypto stakeholders slammed a controversial provision in the CLARITY Act hours before a House markup. The section under dispute seems to reflect previous SEC administration’s policies, which created concerns about classification of tokens. Industry leaders claim the measure conflicts the Act’s main goal of clear digital asset regulation.

Stakeholders Criticize Gensler-era clause in Clarity Act

Under the new CLARITY Act, a section removes tokens protections issued before its enactment. It requires all securities to be treated the same rather than a case-by-case review which denies the SEC classification powers. Market participants have expressed concerns about the change that it could lead to more unclear regulations.

They claim this approach diminishes goals to establish clear token classification and regulatory duties. Furthermore, there are comparisons between this section and the William Hinman speech that excluded ETH from security status. The speech was major reference in the legal battles for Ripple and its XRP token.

CLARITY Act Passes First Markup

The House Financial Services and Agriculture Committees has passed the CLARITY Act in the first markup in Washington, D.C. Members of Congress hope to finalize digital asset legislation and meet President Trump’s August deadline for crypto regulatory reform. This bipartisan action takes place after last year’s FIT21 and tries to reform digital assets regulation in the U.S.

The new proposal outlines SEC and CFTC jurisdictions as well as the transition of digital assets from securities to commodities. The new rules have sparked mixed opinions in the crypto sector because of provisions similar to the SEC policies under Gary Gensler. The latest version has also removed several exemptions that previously benefited innovators.

Although the bill has been criticized, the Blockchain Regulatory Certainty Act (BRCA) has received a lot of support. Eight blockchain firms like Uniswap, support BRCA to protect developers of non-custodial blockchain software. It ensures the developers are not subjected to financial rules tied to intermediaries.

SEC Changes Regulatory Tact

Paul Atkins, the SEC chair, has endorsed decentralized finance and crypto self-custody rights. He stated that the SEC is drafting conditional exemptions for DeFi platforms to make it easier for them to meet compliance needs. The efforts show a shift in direction from previous enforcement strategies.

Stakeholders insist that clear legislation should explain the SEC’s duties, ensure self-custody of assets, support DeFi and tackle centralized trading. They claim that uncertainty could lead companies to MOVE their innovation to countries with clearer regulations. Therefore, they want Congress to avoid provisions that reflect outdated enforcement practices.

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