Cardano Founder Slams the "CLARITY Act": A "Terrible Garbage Bill" That Will Stifle US Crypto Innovation

Recently, Cardano founder Charles Hoskinson launched a fierce critique of the US Cryptocurrency Market Structure Bill, the "CLARITY Act" (HR 3633), calling it a "terrible garbage bill" that could drag the US crypto industry into deeper regulatory quagmire.

Specifically, the "CLARITY Act" would classify nearly all digital assets as securities by default and grant the US Securities and Exchange Commission (SEC) excessive regulatory authority, potentially killing innovation within the US crypto industry.

In a YouTube live stream on March 3, Hoskinson provided a detailed technical breakdown of the bill. He pointed out that the core mechanism of the bill is that any newly created digital asset will be classified as an "investment contract asset" by default, placing it directly under SEC jurisdiction.

However, if projects want to be reclassified as "digital commodities" regulated by the CFTC, they will face difficult-to-quantify decentralization proof standards, highly subjective "value attribution" tests, and the possibility that the SEC could use rulemaking authority to cause indefinite delays for projects.

He emphasized that while mature projects like Cardano and XRP might receive exemptions, this would force all future US crypto innovations to move overseas, ultimately destroying the domestic crypto industry in the long run.

From the legislative process perspective, although the "CLARITY Bill" has passed the House of Representatives, it remains deadlocked in the Senate, and the White House's March 1 deadline has passed without any compromise.

Hoskinson also stressed that the biggest obstacle is not the structural issues he criticizes but the lobbying battles surrounding stablecoin rewards.

Moreover, the banking sector has issued warnings that allowing exchanges to offer stablecoin rewards could trigger large-scale deposit outflows.

Overall, Hoskinson believes that rather than letting the industry slowly suffocate under unreasonable restrictions, it is better to fight back and strive for a truly healthy and sustainable space for growth and development.