CLARITY Act's Failure Is 'Ironic,' ETF Expert Says: 'Will Result in President Trump's SEC Doing Whatever They Want'

ETF Store President Nate Geraci on Wednesday said the CLARITY Act failing to pass is ironic, because it hands the SEC free rein to fast-track crypto through existing laws with no congressional guardrails.Why Does Geraci Call the CLARITY Act’s Failure ‘Ironic’?Geraci posted on X that this “will result in President Trump’s SEC doing pretty much whatever they want within existing laws to fast-track the crypto industry.”He acknowledged that a future administration could reverse some of that work but argued crypto moves fast enough that it may be too late to undo by then.What Is the SEC Actually Planning?The SEC announced an open meeting Friday to create a tailored offering regime for certain investment contracts involving crypto assets, according to Bloomberg.The agency is also preparing to release its innovation exemption for trading tokenized versions of stocks, a move that could open the door to 24/7 stock token trading on blockchains. Bloomberg reported those details could land as soon as Friday.The SEC had planned to release the tokenized stock framework in May but delayed it after pushback from stock exchanges and public companies.The updated proposal is expected to give companies the ability to object if a third party tries to tokenize their stock without consent, addressing one of the core concerns from the earlier draft.Why Is September the Last Real Window for the CLARITY Act?Senate Majority Leader John Thune (R-SD) the CLARITY Act before recess, setting a procedural vote for September 15.The bill needs 60 votes to advance, meaning Republicans need at least seven non-Republican senators. Senator Elizabeth Warren (D-Mass.) has said she wants crypto rules but not these rules, making her a central obstacle.Jefferies analysts said in a note that regulatory agency guidance is not a substitute for legislation because a future administration can roll it back without a congressional vote.Why Would a Democratic Midterm Win Change Everything for Crypto?CoinDesk reported that if Democrats win House and Senate majorities in November, the four committees that handled the CLARITY Act would likely be led by crypto critics.Representative Maxine Waters (D-CA) called the bill the “Calamity Act” and staged a walkout during committee hearings.Senator Warren would likely take the Senate Banking Committee chair. Representative Shontel Brown (D-OH) and Senator Michael Bennet (D-CO) round out the four, all holding “F” ratings from Stand With Crypto.Blockchain Association CEO Summer Mersinger told CoinDesk the industry’s best path is a federal regulatory structure regardless of who controls Congress, arguing it is hard to make a case against that on its merits. Read Also: Photo via Shutterstock