The U.S. Senate Banking Committee clarifies 7 major misconceptions about the CLARITY Act, stating it does not deviate from securities law, and emphasizes investor protection and regulatory boundaries

The U.S. Senate Banking Committee published an article interpreting and clarifying seven major misconceptions about the CLARITY Act, which mainly include:

1. It does not deviate from existing securities laws, but rather is based on established securities law principles, clarifying which digital assets are considered securities and which are commodities.

2. The essence of this act is an investor protection law, aimed at combating fraud, manipulation, and abuse through clear rules, with the goal of preventing a repeat of risks like those seen with FTX.

3. By clearly delineating the regulatory authority of the SEC and CFTC, and establishing a joint advisory committee to coordinate rules, it addresses regulatory gaps while introducing targeted anti-evasion provisions to reduce arbitrage opportunities.

4. It requires key intermediaries to fulfill anti-money laundering and anti-terrorist financing obligations, and strengthens sanctions compliance and the enforcement authority of the Treasury.

5. It does not allow DeFi to become a conduit for illegal funds, emphasizing "precise targeting of illegal activities," and requires centralized intermediaries interacting with DeFi protocols to implement risk management standards, while also establishing specific rules for intermediaries that are not truly decentralized to protect the code and innovation itself.

6. It clearly protects the self-custody rights of software developers and users, not considering developers who do not control user funds and only publish or maintain code as financial intermediaries, while retaining the regulatory authority to intervene in response to real risks.

7. The core objective is to strengthen national security, protect investors, and promote compliant innovation under clear rules, rather than being "tailored" for specific industries.