Draft CLARITY Act bill criticized for favoring large crypto firms

Beincrypto reported that the release on Monday of the bipartisan CLARITY Act bill text — a 278-page negotiated proposal from Senate Banking Committee Chairman Tim Scott — has left much of the crypto community dissatisfied and moved the measure one step closer to passage.

The draft tightens stablecoin rules by restricting interest paid solely for holding balances and narrowing reward offerings, and it introduces sweeping compliance obligations including real-time trade surveillance, expanded registration requirements, and mandatory qualified custodians. Aaron Day, a longtime crypto entrepreneur who reviewed the proposal, told BeInCrypto these measures raise operating costs and effectively advantage well-capitalized incumbents such as Coinbase and Circle while creating permanent demand for analytics firms like Chainalysis.

Day warned smaller exchanges could face a choice between heavy compliance spending or exiting the U.S. market, and said language in the bill could for the first time require protocol developers to register with federal regulators, creating legal uncertainty for DeFi even though the draft does not ban it outright. He also argued that mandatory monitoring would rebuild traditional banking-style surveillance on blockchain on-ramps and off-ramps, changing how most users access Bitcoin.

Key Topics

Crypto, Clarity Act, Coinbase, Circle, Chainalysis, Defi