SEC Threatens Crypto Crackdown If Clarity Act Fails by May
If the Clarity Act stalls before a May deadline, the SEC could reverse course and treat nearly all crypto as securities, sweeping developers and infrastructure providers into broker-dealer rules, according to Coin Center Executive Director Peter Van Valkenburgh.
Key Takeaway
Without the Clarity Act, developers and infrastructure providers face broker-dealer rules designed for Wall Street banks.
Coin Center Executive Director Peter Van Valkenburgh warned the SEC could reverse its stance and treat nearly all crypto as securities if the Clarity Act stalls in Congress.
The agency would resurrect its effort to redefine the Exchange Act so broadly that developers and infrastructure providers get swept up as brokers, dealers, or exchanges whenever their software touches a tokenized security, Van Valkenburgh said. He accused some industry opponents of rejecting developer protections in favor of short-term business interests. The point of passing Clarity is to bind the next administration, not to trust the current one, he added.
Ripple CEO Brad Garlinghouse said negotiations on the bill have not been pretty but expected lawmakers, banks, and crypto firms to eventually reach a consensus. A Galaxy Digital researcher warned the bill's prospects of Senate floor passage will vanish if it fails to reach the floor by May.
Senator Cynthia Lummis defended the bill against claims it fails to protect software developers from money transmitter designation, saying Congress has worked on a bipartisan basis to make the bill the strongest protection for decentralized finance and developers ever enacted. The Clarity Act seeks to consolidate crypto regulations and guidelines, but divisions remain on stablecoin yield, tokenized equity, and DeFi surveillance.
Van Valkenburgh described some crypto industry figures as nihilists who could derail the legislation, warning the industry could be handing future officials a noose to pull tight. Coin Center is prepared to fight in courts if the bill fails, but SEC Chair Atkins said in March 2026 that only Congress can rewrite the law and the agency stands ready to work with CFTC Chairman Michael Selig to implement the Clarity Act.
This article was written based on reporting from Dlnews.
