Ex-CFTC Chairman Shrugs Off CLARITY Act Delay, Says Senator Warren Is Defending Dodd-Frank Power

Giancarlo warned that the GENIUS Act and the CLARITY Act keep financial surveillance alive by expanding Bank Secrecy Act obligations to new financial systems based on blockchain.

• Former CFTC Chair Chris Giancarlo said crypto innovation will continue even if the Senate doesn’t pass the CLARITY Act.
• He urged the industry to stop treating the CLARITY Act as a “do-or-die” bill.
• But Giancarlo said its concerns about the CLARITY Act would not stop it from providing major benefits.

Former Commodity Futures Trading Commission (CFTC) Chairman Chris Giancarlo said the crypto industry should stop treating the CLARITY Act as a do-or-die proposition, arguing that the technology’s rise will continue regardless of whether the Senate clears the market-structure bill.

The shift toward moving assets of value onto blockchain networks "is going to happen whether the Clarity bill passes or not," Giancarlo said in an interview with Scott Melker released on Sunday. "It may change where it gets built and what gets built."

"Perhaps it's time to stop making such a big deal out of Clarity," Giancarlo said, noting the internet scaled for three decades without an authorizing statute.

The remarks come days before the Senate's August recess, the deadline industry negotiators had targeted for passage. Senate Majority Leader John Thune said in late July he did not expect the bill to clear the chamber before the break, as hopes faded for a pre-recess cloture vote.

Ethics Fight An 'Own Goal'

Giancarlo said the ethics showdown over President Donald Trump’s crypto dealings was “a little bit of an own goal” by the White House. He said he refused to buy Bitcoin (BTC) when he was in government because his agency was drafting regulations for the digital asset.

But he said the ethics dispute “may be a little bit of an excuse,” arguing some Senate Democrats might be unable to back the bill under pressure from the left flank of their party. Senator Elizabeth Warren (D-MA) sees crypto as a challenge to Washington’s monopoly over capital allocation that it established with the Dodd-Frank Act, he said. "If we don't get Clarity, innovation goes on," he said.

Surveillance Warning On Both Bills

Giancarlo said both the GENIUS Act, which recently marked one year since enactment, and the CLARITY Act carry what he called an unintended consequence. Extending the Bank Secrecy Act's reach over the new financial rails, the law, he said, "is about surveillance of our financial transactions" and is due for a "complete revisit" on Fourth Amendment grounds.

He said the CLARITY Act still holds "a lot of great value," including settling jurisdictional lines between the Securities and Exchange Commission and the CFTC and reauthorizing LabCFTC, the fintech office he launched as chairman.

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