Full agreement on every detail is rare for legislation of this scope, and a handful of loose ends inevitably remained. But what ultimately held the bill up was ethics, specifically the risk of conflicts of interest at the highest levels of government. The United States gains little from a crypto sector widely perceived as rife with corruption and self-dealing, and safeguarding public trust is crucial.
Even so, it was a mistake to sacrifice the Clarity Act on the altar of ethics, because other legislative avenues for addressing such concerns would have stayed open even if the bill had passed.
Underlying all of this is a question of fairness. Nearly every other part of American finance operates within a defined regulatory perimeter, where firms know which rules bind them and which regulator enforces compliance. Crypto has no such perimeter written into law. Elsewhere, many developed economies—from the European Union and the United…
