Federal Agency Ban on Rescuing Digital Assets in the CLARITY Act Amendment Rejected

BlockBeats News, May 15th - During the Senate Banking Committee hearing on the "CLARITY Act," Senator Smith proposed an amendment. I believe we can all agree that cryptocurrencies are extremely volatile, with a single tweet capable of causing drastic price swings. For example, since hitting an all-time high last October, Bitcoin has dropped by nearly a third, and its value has fallen by over half from its peak. And these are just the two most mainstream assets in the crypto market. In the 2022 crypto crash, nearly $2 trillion in crypto asset value evaporated. I am quite concerned that the current version of the bill being discussed today will ensure that the next crash will be even larger than the one in 2022. Therefore, the purpose of this amendment is simple: to prohibit federal agencies from bailing out digital assets, preventing taxpayers from footing the bill. When that scenario occurs—should I say, "when that scenario occurs"?—taxpayers should not be left holding the bag.

Senator Cynthia Lummis opposed the amendment, stating that the "CLARITY Act" does not authorize a bailout of the crypto industry. It establishes rules for digital assets and does not create bailout guarantees or taxpayer backstops. This amendment is unnecessary and detracts from the core purpose of the bill. We should focus on creating a clear regulatory framework rather than banning something that does not yet exist.

The amendment was rejected with 11 votes in favor and 13 votes against. The "Cryptocurrency Market Structure Act" (a.k.a. the CLARITY Act) is currently undergoing a line-by-line vote on the proposed amendments.