Minority staff of the Senate Banking Committee outlined five shortcomings of the proposed U․S․ crypto regulatory framework under the Digital Asset Market Clarity Act, arguing that it fails to sufficiently protect investors and maintain financial stability and national security․
The minority report, drafted by ranking minority member Sen․ Elizabeth Warren, argues the bill could establish a dual regulatory regime so that some blockchain-based assets would not be considered securities․
Minority staff note that crypto issuers may be able to self-certify exemptions and that the SEC and state officials’ disclosure, supervision, and enforcement authority would be diminished․ Labor groups have also expressed concerns with pension assets․
The bill makes changes to consumer remedies․ Minority staff said it would remove digital assets from securities laws, which could limit antifraud enforcement, preempt states and tribes, and deprive investors of a private right of action․ The analysis also states that the legislation does not adequately account for forced arbitration for cryptos․
Other illicit finance issues minority staff say are still unaddressed include the potential for businesses affiliated with decentralized finance platforms to evade some AML and sanctions requirements, including sanctions for crypto mixers․
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The Republican majority of the committee rejects such arguments, saying the CLARITY Act strengthens anti-money-laundering protections, fraud provisions and federal oversight of the market․
Related to concerns about financial stability, banking groups representing community banks say stablecoin yields could incentivize deposit flight to larger institutions, reducing liquidity for smaller banks and limiting their ability to lend․ Similarly, minority staff are concerned with provisions permitting banks to hold more crypto collateral and derivatives, and the risk of losses impacting the federal safety net․
The politics of cryptocurrency in the U․S․ are largely dominated by President Donald Trump’s investments․ According to the Senate Banking minority staff, Trump earned over $1․4 billion in 2025 from cryptocurrency, nearly two-thirds of his income․
They also argue that there would be enforcement gaps in the ethics provisions, since while the Justice Department would be able to bring a case, state attorneys general and private citizens would be barred․
Most did not make this broader criticism, with proponents arguing the law offered consumer protections and U․S․ jurisdiction for digital asset activities․ Coinbase CEO Brian Armstrong said he supported congressional efforts to clarify the market․
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The question now is if lawmakers, amid pushes for regulatory clarity, can resolve the key disagreements around investor protections, illicit finance, systemic risk and government integrity reviews well enough to forge a package that could gain the political backing needed to pass the Senate․
