What is the CLARITY Act and why does it matter for crypto?

The CLARITY Act is a proposed US law aimed at creating clear rules for digital assets, including how tokens are classified and how crypto firms are regulated. It matters because it could provide long-term legal certainty for the industry instead of relying on changing regulatory interpretations.

Why has the CLARITY Act stalled in the US Senate?

The bill has stalled due to disagreements between lawmakers, banks and crypto firms, particularly around whether stablecoins should be allowed to offer yields. These unresolved issues have delayed progress and prevented a unified regulatory framework.

What is Coin Center warning about future crypto regulation?

Coin Center warns that without legislation like the CLARITY Act, future US administrations could take a more aggressive stance on crypto. This could include stricter enforcement actions and less favourable treatment of developers and companies.

How could this impact crypto developers in the US?

Without legal protections, developers could face prosecution under existing laws, such as being classified as unlicensed money transmitters. This creates uncertainty and could discourage innovation in the US crypto ecosystem.

What does “prosecutorial discretion” mean in this context?

Prosecutorial discretion means regulators and authorities decide case by case who to enforce rules against. In crypto, this could lead to inconsistent or politically influenced enforcement rather than clear, predictable rules.

How has US crypto regulation changed recently?

Since Gary Gensler stepped down as SEC Chair in January 2025, regulators have taken a more crypto-friendly approach, including dropping some enforcement cases. However, these changes are not permanent and could be reversed.

Is the current regulatory environment bullish or bearish for crypto?

Short term, the environment appears more supportive due to reduced enforcement pressure. Long term, the lack of clear legislation is a risk, as future administrations could tighten regulations significantly.

What are the main risks for investors if the CLARITY Act fails?

Key risks include regulatory uncertainty, potential crackdowns on crypto firms and reduced innovation in the US market. This could impact market sentiment, liquidity and the growth of crypto projects.

Cryptocurrency

Image for illustrative purposes only. Not a real photo.

US CLARITY Act delay raises crypto crackdown risk

Written by Mahathir BayenaPublished Mar 30, 2026, 12:00 AM

The failure to pass the CLARITY Act in the US Senate could expose the crypto industry to stricter enforcement under future administrations, according to Coin Center.

The bill has stalled as lawmakers, banks and crypto firms remain divided on key provisions, including whether third parties should be allowed to offer yields on stablecoins.

“The point of passing CLARITY is not to trust this administration. It is to bind the next one,”

Said Coin Center executive director, Peter Van Valkenburgh.

The proposed legislation aims to establish a clear regulatory framework for digital assets, including rules for intermediaries and token classification, but progress has been hindered by ongoing policy disagreements.

Without statutory protections, Van Valkenburgh warned the industry could face a system shaped by prosecutorial discretion, where regulators and the Department of Justice may take a more aggressive stance toward developers.

Recent regulatory easing following the departure of former SEC Chair Gary Gensler has improved sentiment, but the absence of permanent legislation leaves those changes vulnerable to reversal.

The debate highlights the broader risk that short-term regulatory flexibility could give way to long-term uncertainty, potentially reshaping the US crypto landscape depending on future political leadership.