Hill Calls CLARITY Act the Next Step in Bipartisan Crypto Work
Hill traced the House’s digital asset work from hearings on Meta’s Libra project and the collapse of FTX to the passage of FIT21 and the CLARITY Act. He said lawmakers from both parties had spent several years trying to create rules that distinguish functional blockchain tokens from securities investment contracts.
Hill compared the current debate to Congress’ approach to the internet in the 1990s, when lawmakers avoided regulating the underlying network and instead focused on activities conducted through it.
He also pointed to Helium as an example of blockchain technology being used outside traditional financial markets. Hill said statutory certainty was necessary to protect companies from shifting regulatory interpretations and allow innovators to build in the United States.
WisdomTree Says SEC Exemptions Cannot Replace CLARITY Act
House Financial Services Committee Chairman French Hill questioned whether the digital asset industry could rely on SEC exemptive relief if the Senate fails to pass the CLARITY Act.
WisdomTree Chief Legal Officer Ryan Louvar said the current SEC leadership had created a more pro-innovation environment and granted relief that allowed new tokenized products to reach the market. However, he said agency-level decisions could not provide the durable certainty offered by legislation.
“We really need durable rules that are embedded within what Congress has approved,” Louvar said. He added that digital asset classifications, the division of SEC and CFTC authority and regulatory modernization must be written into law so the framework survives changes between presidential administrations.
French Hill Questions Whether SEC Relief Can Replace CLARITY Act
House Financial Services Committee Chairman French Hill raised concerns that temporary regulatory relief cannot provide the same certainty as legislation passed by Congress.
Hill presented a scenario in which the Senate fails to advance the CLARITY Act and regulators instead attempt to support tokenized finance through individual exemptions. He noted that WisdomTree had benefited from SEC exemptive relief before asking why placing the framework in law would be more important for long-term regulatory and legal certainty.
His question highlighted a central argument behind the hearing: agency exemptions can allow individual products to operate, but they may not create consistent rules for the wider digital asset market or bind future regulators.
Tokenization Should Not Be Viewed as a new Asset Class
Louvar said tokenization should not be viewed as a new asset class, but as new infrastructure for holding, transferring and settling existing financial products.
He compared the shift to the growth of exchange-traded funds, which did not create stocks or bonds but made them more accessible, transparent and cost-efficient for investors.
Tokenization could deliver similar benefits by improving settlement speed and flexibility while supporting financial markets that increasingly operate around the clock, Louvar said.
Section 505 Preserves Core Identity of Tokenized Securities, Says Ryan Louvar
WisdomTree Chief Legal Officer Ryan Louvar highlighted Section 505, which would preserve the principle that a tokenized security remains the same security it represents while allowing regulators to modernize the operational rules applied to blockchain infrastructure.
Louvar also told lawmakers that the CLARITY Act could provide greater certainty around digital asset classification and the division of authority between the SEC and CFTC.
“Same regulatory substance, modernized operational mechanics,” Louvar said. He argued that the framework could allow tokenized products to scale without weakening the investor protections attached to traditional securities.
FTX Failure Supports CLARITY Act, Not Affiliate Ban
Abernethy told lawmakers that FTX should not be used to justify a blanket ban on exchange affiliates trading on affiliated platforms.
She said FTX collapsed because an unregulated offshore affiliate misappropriated customer assets, not simply because affiliated entities were allowed to trade. “A trading ban would not have stopped that,” Abernethy said, noting that the conduct was already illegal for federally registered firms.
Abernethy pointed to LedgerX, FTX’s CFTC-regulated exchange and clearinghouse, as evidence that federal supervision worked. Customer assets held there were protected, she said, while the broader offshore group failed.
“The lesson of FTX is to bring these markets inside the federal perimeter,” Abernethy said, arguing that the CLARITY Act would impose customer-asset segregation, capital requirements, surveillance and federal examinations across registered crypto platforms.
CLARITY Act Could Bring Crypto Markets Back Onshore: Randi Abernethy
Bullish Head of Clearing and Group Risk Randi Abernethy told lawmakers that the absence of a federal digital asset framework pushed the company to build under regulators in Germany, Hong Kong and Gibraltar.
She said Bullish entered the U.S. market after receiving a New York Department of Financial Services license last September and is now working with the CFTC and NFA on registrations for a federally regulated exchange, clearinghouse and intermediary.
“We are not asking to operate in the shadows; we are asking for a rulebook,” Abernethy said. She argued that the CLARITY Act would draw a clearer line between the SEC and CFTC and bring digital asset activity under American regulators and investor protections.
CLARITY Act Would End Costly Regulatory Ambiguity, Nova Labs Says
Nova Labs Chief Legal Officer Sarah Aberg told lawmakers that the company spent years and significant resources defending SEC claims that were ultimately dismissed with prejudice. The regulator had alleged that parts of the Helium ecosystem, including rewards offered to users helping map network coverage, amounted to unregistered securities offerings.
“Those were years not spent deploying hotspots, not building emergency communications capabilities, and not connecting underserved communities,” Aberg said. She argued that regulatory ambiguity does not protect investors, but instead delays companies trying to follow the rules while failing to stop bad actors.
Aberg said the CLARITY Act would distinguish digital assets functioning as securities from digital commodities used to operate decentralized networks and assign oversight between the SEC and CFTC accordingly. For Helium, she said that distinction could determine whether the network can expand its hotspot infrastructure and deliver broader emergency communications, broadband access and network resilience.
“Clarity is not a call for deregulation; it is a call for the right regulation,” Aberg said, urging lawmakers to move the bill toward enactment.
French Hill Opens Hearing With Call for US Crypto Leadership
House Financial Services Committee Chairman French Hill opened the CLARITY Act hearing at Federal Hall by returning to a warning he delivered in the same room seven years ago: the United States needed to lead in shaping the global digital asset economy or risk losing innovation and investment to overseas markets.
“Today, we are delivering on that mission,” Hill said, presenting the hearing as the next step in Congress’ effort to replace regulatory uncertainty with a defined market structure for digital assets.
The hearing comes one year to the day after the House passed the CLARITY Act alongside the GENIUS Act and the Anti-CBDC Surveillance State Act. Lawmakers are now examining how the framework could support domestic blockchain development, establish clearer oversight and keep digital asset businesses operating in the United States.
CLARITY Act Hearing Begins in New York
The House Financial Services Subcommittee hearing on the CLARITY Act is now underway at Federal Hall National Memorial in New York City. The session, titled “Building the Future of Finance: How the CLARITY Act Unlocks Innovation,” is examining how clearer federal rules could affect digital asset companies, developers and financial institutions operating in the United States.
Sarah Aberg of Nova Labs, Randi Abernethy of Bullish, Ryan Louvar of WisdomTree and Jason Somensatto of Coin Center are appearing before lawmakers. Their testimony is expected to cover blockchain infrastructure, crypto exchanges, tokenized financial products and protections for open-source developers.
The hearing will also consider H.Res. 111, which supports U.S. leadership in blockchain technology, and H.R. 8957, a proposal to establish a Strategic Bitcoin Reserve and Digital Asset Stockpile for federally held assets.
Crypto Stocks Trade Lower Ahead of CLARITY Act Hearing
Crypto-linked equities were broadly lower ahead of the House hearing. Coinbase shares fell 2.97% to $155.72, while Strategy declined 2.56% to $91.62 and Circle slipped 2.18% to $59.32.
Bitcoin mining stocks recorded steeper losses. Hut 8 dropped 7.75%, Cipher Mining fell 6.97%, TeraWulf lost 6.12%, Riot Platforms declined 6.11% and IREN traded 5.94% lower. BitMine was down 3.66%, while Robinhood fell 7.31% to $98.25.
The widespread losses left crypto equities under pressure as lawmakers prepared to debate the regulatory framework governing the sector.
Bitcoin Holds Near $62,655 Ahead of CLARITY Act Hearing
Bitcoin was trading near $62,655 ahead of the House Financial Services hearing, with its market capitalization at roughly $1.25 trillion. The cryptocurrency recorded about $24.65 billion in 24-hour trading volume, down 18.46%, indicating weaker market activity as lawmakers prepare to discuss the future of U.S. digital asset regulation.
Ethereum traded at $1,807.51 and was down 4% over the previous 24 hours, while its market capitalization stood at $218.13 billion. The price action showed that major cryptocurrencies remained under pressure before the hearing, although there was no clear indication that the declines were directly connected to the CLARITY Act proceedings.
Crypto and Finance Executives Prepare to Testify
Lawmakers are expected to hear testimony from Sarah Aberg, chief legal officer at Nova Labs; Randi Abernethy, head of clearing and group risk at Bullish; Ryan Louvar, chief legal officer at WisdomTree; and Jason Somensatto, director of policy at Coin Center.
The witnesses represent blockchain infrastructure, crypto trading, asset management and digital asset policy. Their testimony is expected to address how the CLARITY Act could affect token issuers, exchanges, investment products, open-source developers and other participants operating across the digital asset market.
CLARITY Act Hearing Set to Begin in New York
The House Financial Services Subcommittee on Digital Assets, Financial Technology, and Artificial Intelligence is scheduled to hold a hearing on the CLARITY Act at Federal Hall National Memorial in New York City. The session, titled “Building the Future of Finance: How the CLARITY Act Unlocks Innovation,” is set to begin at 10:00 a.m. ET on July 17.
The hearing will examine how the proposed legislation could create a federal regulatory framework for digital assets and encourage blockchain companies, developers and financial institutions to build and invest in the United States. The discussion is expected to focus on regulatory jurisdiction, market oversight and the country’s position in global financial innovation.
