Crypto Win? An Expert Examines the Draft of the Latest Market Structure Bill—Here’s What You Need to Know
As the Senate Banking Committee prepares to mark up the anticipated crypto market structure bill, known as the CLARITY Act, a revised draft has been released after extensive deliberations.
This new version aims to provide a clear regulatory framework for digital assets, defining oversight responsibilities between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
Key Takeaways from the Draft Crypto Bill
The latest draft, released Monday night, includes key provisions recognized as beneficial to the industry. Notably, Paul Barron, market expert, he revealed that the bill now defines “Maintenance and Support Services” as a recognized profession, insisting that these services are considered “administrative or ministerial.”
As a result, registered intermediaries will be allowed to make it easier for customers while ensuring that individual assets are separated from the platform’s funds. However, assets can be combined with others for efficiency, such as an omnibus account.
The bill also strengthens the existing anti-money laundering (AML) framework as well know your customer (KYC) regulations. Exchanges and brokers will still be required to comply with the Bank Secrecy Act, perform KYC checks, and monitor any illegal financial activities.
Important wins for consumers include the obvious right to self-control. Section 105(c) of the bill gives US citizens the right to maintain a hardware or software portfolio in order to obtain their legal right to own digital assets.
Additionally, this section protects the ability to engage in direct peer-to-peer (P2P) transactions using wallets without the need for financial intermediaries.
In addition, the law aims to protect fund developers. Section 109 ensures that unregulated blockchain developers or providers of hardware or software that facilitate client storage will not be classified as money transmitters.
This provision of the crypto market structure bill protects wallet developers, such as those from Ledger, Tangem, and MetaMask, from being regulated as financial institutions based on their coding efforts.
Basic Understanding of DeFi Provisions
Another important aspect of this bill is its provisions regarding funds distributed to different areas. The law establishes exemptions that help protect protocols and DeFi developers from being phased out central exchange (CEXs) or sellers.
Specifically, Section 309 states that individuals will not be subject to the Securities Exchange Act solely for activities such as developing DeFi trading protocols, publishing user communications for blockchain systems, or operating environments.
For consumers using DeFi products and processes, the Act creates a legal “safe harbor”, allowing the continued use of decentralized currencies without the imposition of intermediaries. However, it is important to note that this does not provide protection against any illegal financial activities.
Pro-crypto Senator Cynthia Lummis, who led the Republican Party’s negotiations to achieve the best results for the growth of digital assets in the country, posted the following the message to his Democratic colleagues on social media:
After months of hard work, we have a double-sided document ready for Thursday’s tag. I urge my Democratic Alliance colleagues: do not back down from our progress. The Digital Goods Marketplace Transparency Act will provide the transparency needed to preserve innovation in the US and protect consumers. Let’s do this!
As for the chances of the crypto bill passing, Barron suggests a medium to high probability, estimating a 60-70% chance of it becoming law in early 2026.
However, the expert asserted that the outcome may depend on removing or softening the “Anti-CBDC” provisions or making banking agreements regarding stablecoin funds to meet the Senate’s limit.
Featured image from DALL-E, chart from TradingView.com
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