CLARITY Act Leaves 5 Loopholes, From Pensions to Trump’s $1.4B Crypto

Senate Banking Committee minority staff say the Digital Asset Market Clarity Act fails five minimum standards, potentially leaving pensions exposed and failing to stop President Trump’s next $1.4 billion in crypto profits. A procedural Senate vote is set for Sept. 15.

Senate Banking Committee majority staff contend the legislation strengthens investor protections, establishes federal oversight, and targets fraud and money laundering.

A two-tiered system would let assets offered on a blockchain escape the authority of the SEC, staff contend. Companies issuing crypto could self-certify their exemption from securities requirements. Staff say that would remove disclosure and supervision tools available to the SEC and state regulators to safeguard investors.

That fact sheet names six organizations among those raising pension-related concerns, including Healthy Markets, an investor advocacy group counting pension funds and financial firms among its members. Five labor organizations are also named: the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), the American Federation of State, County and Municipal Employees (AFSCME), the Service Employees International Union (SEIU), the National Education Association (NEA), and the American Federation of Teachers (AFT).

Remedies narrow sharply under the fifth standard, which covers what happens after an investor is defrauded. Carving assets out of securities laws would weaken SEC antifraud enforcement, staff argue. State and tribal authorities could also be stripped of authority to enforce their own securities, consumer protection, and gaming laws. Staff also contend the bill fails to establish an enforceable private right of action and does not address the use of forced arbitration in crypto disputes.