Why Crypto’s Future Hinges on a Stalled Washington Bill
A failure to enact federal legislation like the CLARITY Act could leave the U.S. cryptocurrency industry vulnerable to future regulatory crackdowns, according to Peter Van Valkenburgh, executive director of the advocacy group Coin Center.
Van Valkenburgh issued a stark warning in a social media post, arguing that rejecting statutory protections for developers in bills such as the CLARITY Act (the Crypto Market Structure Bill) and the Blockchain Regulatory Certainty Act prioritizes short-term business interests over the industry’s long-term survival. He cautioned that without such laws, the sector remains at the mercy of shifting political winds and enforcement whims.
“The point of passing CLARITY is not to trust this administration. It is to bind the next one,” Van Valkenburgh stated. He described a scenario without the bill’s developer safeguards as “a world governed by prosecutorial discretion, political fashion, and fear.”
The Stalled Path to Regulatory Certainty
The CLARITY Act, which seeks to establish a clear regulatory framework for digital assets—including how tokens are classified and how crypto intermediaries are registered—stalled in the Senate. Negotiations among banks, crypto firms, and lawmakers broke down over contentious provisions, such as whether to permit yields on stablecoins. This legislative inertia creates a vacuum where no permanent, neutral rules exist.
Van Valkenburgh predicts that absent new laws, a future administration’s Department of Justice could revive aggressive prosecutions of privacy-enhancing tool developers under existing, ill-fitting money transmission statutes. Furthermore, any current “friendly” regulatory guidance from agencies like the Securities and Exchange Commission (SEC) could be unilaterally rescinded.
A Precedent of Enforcement Over Rulemaking
Van Valkenburgh’s concern is rooted in recent history. During the previous presidential term, former SEC Chair Gary Gensler faced widespread industry criticism for what critics called a “regulation by enforcement” approach. The SEC pursued numerous legal actions and settlements with crypto firms instead of engaging in transparent, formal rulemaking to define the law.
Since Gensler’s resignation in January 2025, the SEC under new leadership has signaled a shift, dismissing several high-profile enforcement cases and issuing more accommodating guidance. This change, however, is attributed to the discretion of the current officials and is not codified in law.
“If we lose this moment because we thought we’d have a bit more revenue and a bit more latitude under the short-term friendly discretion of the current administration, then we lose our way,” Van Valkenburgh said. He framed the issue as a fundamental test of crypto’s values: failing to secure permanent legislative protections would mean compromising on the principles of transparency, neutrality, and openness. Worse, he argued, the industry could inadvertently provide the tools for its own suppression by future regulators.
Source: Peter Van Valkenburgh, Coin Center
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