Who needs CLARITY anyway? ARB could see 70X increase: Hodler’s Digest

CLARITY vote fails, long live CLARITY After a year’s buildup, the US Senate failed to pass a cloture motion on the Digital Asset Market Clarity (CLARITY) Act. The motion received just 49 votes in favor and 50 against, well short of the 60 votes required. However, Republican Senator Thom Tillis’s “no” vote was not all it seemed, and he confirmed he’d only switched sides at the last minute to enable him to call a new vote in future. So does that mean the CLARITY Act could be resurrected? The GENIUS bill suffered a similar failed vote on cloture and then went on to pass just 11 days later. While there is a small chance that CLARITY could still pass, the politics and the number of legislative days available suggests it’s unlikely. Congressman Shri Thanedar, a Democrat who supported CLARITY in the House, told Magazine the timeline was a “major barrier.” “There are only 20 legislative days left in this Congress, all of them after the midterms, making odds of a 2026 compromise, unfortunately, very low.” Seven Democratic senators who had voted against the bill claimed they “remain committed” to passing it. At some point. “We were ready to strike a deal today and in discussions right up until the vote. Republican leadership shut it down at the very last minute,” said Sen. Angela Alsobrooks. NEAR chief legal officer Abhishek Vaidyanathan noted the House had already cancelled two sitting weeks and that the Senate’s state work period began October 5. “Now that cloture failed, the next Congress is the likely next opportunity to address crypto market structure,” he said. SEC Chair proposes new rules in absence of CLARITY After the failed vote, Ripple CEO Brad Garlinghouse predicted that US regulators will “continue to work hard to issue rules to fill the legislative gap.” The industry didn’t have long to wait. Two days later the US Securities and Exchange Commission announced a five year long exemption allowing limited trading of tokenized US stocks on decentralized public blockchains. The Innovation Exemption allows tokenized stocks to be traded using automated market makers, exempting the protocols from having to register as securities exchanges. However the new rules do not exempt “synthetic” stock tokens that do not provide holders with all the same rights as traditional stocks. This is bad news for pretty much all of the stock tokens issued by xStocks and Robinhood to date. CFTC swoops in to propose new crypto rules The Commodity Futures Trading Commission also announced regulatory relief for “passive software” providers that connect users to regulated derivatives firms and exchanges. It issued a no-action position stating it would not recommend enforcement against qualifying providers for failing to register as brokers when facilitating trading with CFTC-registered firms and exchanges.