This is one outlet's own report from Forbes — the article as it was filed.
AIPROPX ReportForbes · 3h ago
What WSJ Gets Wrong About The CLARITY Act And Who Decides Without It
Forbes contributors publish independent expert analyses and insights. Crypto law expert | DCG board | Forbes voice | SiriusXM podcast host Follow Author Aug 05, 2026, 06:47pm EDT --:-- / --:-- This voice experience is generated by AI. Learn more . This voice experience is generated by AI. Learn more . Summary Despite the WSJ and Senator Hawley's objections to the crypto market structure bill, the article asserts that congressional inaction would be detrimental, not neutral. Rejecting the Digital Asset Clarity Act, citing concerns over stablecoin rewards and AML, would not preserve the status quo. Instead, it would default crypto regulation entirely to executive agencies, entrenching "regulation-by-enforcement" and subjecting the industry to unstable, administration-dependent policies. The author argues the bill already addresses the cited loopholes. With both Republican and Democratic factions withholding support, Congress risks empowering agencies and forfeiting a critical, perhaps final, chance for legislative clarity and stability in digital asset markets.
Hours after The Wall Street Journal editorial board published its case against passing the crypto industry’s market structure bill as written, Senator Josh Hawley (R-Mo.) says he is a no vote without changes to protect community banks in his state, according to POLITICO’s Jasper Goodman via X/Twitter. The two developments share more than timing.
They share an argument, and the argument shares a glaring flaw.
Both treat the failure of the Digital Asset Market Clarity Act (the “Clarity Act”) to pass out of the Senate as a neutral outcome, a pause that simply preserves the status quo while Congress continues working to draft tighter language. Administrative law does not work that way. If the Senate leaves for its August recess without acting, digital asset regulation does not pause. It defaults to the discretion of executive agencies, with no new statutory guardrails, no new ethics title, no yield restrictions, and no anti-money laundering framework beyond what GOP-led regulators choose to improvise.
The Journal 's own premises are the strongest case for the very bill it declined to endorse. The editorial opens by recounting how the prior administration regulated crypto through regulation-by-enforcement, with the Securities and Exchange Commission (SEC) under former Chair Gary Gensler punishing developers and exchanges “though federal law didn't expressly give him authority to regulate them.” It concedes that a regulatory gray zone persists today and also credits the bill with insulating investors and banks from the disruptive policy pendulum swings of whichever administration comes next. It concludes that the jurisdictional architecture, the market structure rules, and the tokenized securities framework all merit support.
Each of those observations is an argument for a statute because a statute is the only instrument that ends regulation by enforcement, closes the gray zone, and binds future administrations. The editorial assembles that case, then concludes the Senate should not pass the bill as written because of two loopholes : one involving stablecoin rewards and one involving decentralized networks. Neither objection engages the text.
On rewards, the editorial argues the bill would bless a workaround to the GENIUS Act's prohibition on stablecoin interest by letting issuers arrange for exchanges to compensate customers who hold their tokens. But Section 404 of the merged Senate text , released July 22 by Senator Cynthia Lummis (R-Wyo.), prohibits covered digital asset service providers and their affiliates from paying interest or yield based solely on holding a stablecoin balance, and it reaches programs that are "economically or functionally equivalent to interest on a bank deposit" even when packaged as rewards, loyalty points, or promotions, according to the sponsors’ section summary.
The provision covers direct and indirect payments and directs regulators to separate disguised yield from legitimate transaction-based rewards through rulemaking. Reasonable minds can differ as to whether that line will hold in practice. That debate requires citing the section, and the editorial cites none. It is also worth remembering how far this fight has traveled. By early 2025, the stablecoin question was no longer whether to regulate but how. GENIUS answered part of the how. Section 404 is the rest of it, and the rest of it only exists inside a bill that passes.
The anti-money laundering objection fares no better. The editorial describes decentralized networks as platforms where users transact directly while an operator collects a cut, then warns the bill exempts them from anti-money laundering and know-your-customer rules. An operator taking a cut of transactions is an intermediary, and the merged text applies Bank Secrecy Act obligations to digital commodity brokers, dealers, and exchanges, requiring anti-money laundering and counter-terrorist financing programs, suspicious activity monitoring, and customer identification, per the committee fact sheet and the express language in Sec. 10201 of the bill. Notably, the same text funds FinCEN through 2031, creates a new Treasury special measure authority for digital asset laundering concerns, and imposes registration, disclosure, and holding period requirements on crypto kiosks. Whether the decentralization definitions are drawn precisely enough is a fair question for markup. It is not answerable by analogy to an auction site.
The deeper lesson predates this bill. Before the 2024 election, while the national conversation fixated on which presidential candidate would make America the crypto capital of the world, the constitutional reality was already settled: the next president was never going to define crypto's future, because Congress holds that power . Under Article I, the legislative power is the power to specify. When Congress declines to specify, authority does not evaporate. It...
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