Crypto Industry Leaders Raise Concerns Over CLARITY Act’s ‘Gensler-Era’ Amendment Ahead Of Markup

Crypto industry players are reportedly concerned about a new section added to the Digital Asset Market Clarity (CLARITY) Act of 2025 ahead of today’s legislative process, which seems to resemble the regulatory approach of the previous administration.

Crypto Industry Players Raise The Alarm

On Tuesday, crypto industry players were reportedly concerned over a new section in the Digital Asset Market Clarity Act of 2025 ahead of today’s markup. Journalist Eleanor Terret revealed that some industry leaders raised the alarm over the legislation’s amended text, which has been allegedly described as a “Gensler-era provision.”

The legislation, introduced on May 29 by Chairman of the House Financial Services Committee French Hill, seeks to establish a regulatory framework for crypto assets in the US and provide the long-awaited clarity and protection for the industry.

The bipartisan bill aims to protect consumers by requiring developers and customer-facing firms to provide crucial disclosures to their clients and keep the companies’ funds separate from those of their customers.

Moreover, the CLARITY Act also seeks to facilitate the growth of crypto projects by providing developers with a clear pathway to secure funding under the oversight of the US watchdog.

“Our bill brings long-overdue clarity to the digital asset ecosystem, prioritizes consumer protection and American innovation, and builds off our work in the 118th Congress,” Hill stated last month.

However, Terret reported that the new amendment would “eliminate exemptions for previously issued tokens,” giving the Securities and Exchange Commission (SEC) “weeping authority to determine, on a case-by-case basis, whether each token qualifies as a security.”

According to the post, critics consider that the change would reintroduce the “uncertainty the bill is meant to resolve.” Meanwhile, some crypto community investors also expressed concern about the provision news, suggesting that the change could allow a game of “winners and losers again.”

It’s worth noting that the CLARITY Act has been heavily criticized by Democrats, with some suggesting that the bill could allow US President Donald Trump to “cash in” on its crypto ventures.

Democratic Representative Maxine Waters expressed her concerns last week, affirming that “this rushed, overly complicated bill will increase investor harm, which already runs rampant in today’s crypto market.”

She argued that “Some of the riskiest activities are broadly exempted from the bill, leaving our constituents with no one to turn to when their money vanishes. The bill puts our national security at risk and contains no penalties for crypto criminals.”

CLARITY Act Momentum Continues

Notably, crypto industry players and US lawmakers pushed for the inclusion of the Blockchain Regulatory Certainty Act (BRCA) in the market structure legislation, seeking to offer a safe harbor for software developers and infrastructure providers.

As reported by Bitcoinist, eight crypto policy organizations urged US Congress leaders to include the BRCA, first introduced in 2023, in the CLARITY Act in a joint statement last week. The bill was reintroduced by Republican Representative Tom Emmer on May 21, 2025, with Democratic Representative Ritchie Torres as a co-sponsor.

On June 8, the amended version of the Clarity Act included clarity for non-custodial developers by adding the BRCA to the bill. In a joint statement on Monday, the crypto groups advocating for the inclusion stated:

This is a meaningful step toward protecting developers of non-custodial, peer-to-peer technologies while maintaining strong oversight of custodial financial institutions.

The updated bill reflects a careful balance–building on FinCEN’s 2019 guidance to clarify that when developers and infrastructure providers don’t control customer funds, they shouldn’t be regulated like money transmitters.

Despite concerns about the “Gensler-era” amendment, industry players like crypto exchange Coinbase affirmed that “Bipartisan momentum is building. Lawmakers from both sides agree: it’s time to protect consumers and unlock American innovation with clear crypto legislation. As Congress prepares for a key vote to advance the CLARITY Act, the message is clear: vote YES.”

At the time of writing, the legislation passed the House Committee on Agriculture markup with a 47-6 vote after a nearly 3-hour debate. Now, the bill awaits the House Financial Services Committee markup, Terret reported.