The Clarity Act hangs in the balance: the SEC may hold crypto accountable, and Ripple and developers face immense pressure

Gate News update: the outlook for the “Clarity Act” remains unclear, triggering heightened regulatory tensions in the cryptocurrency market. Supporters warn that if the bill fails to pass, the U.S. Securities and Exchange Commission (SEC) could reclassify nearly all cryptocurrencies as securities, increasing legal risk for developers and infrastructure providers. Ripple CEO Brad Garlinghouse said that negotiations “aren’t going well,” but he remains optimistic that a final agreement can still be reached.

Coin Center executive director Peter Van Valkenburgh noted that without the “Clarity Act,” the SEC could restart its efforts to redefine the Securities Exchange Act, exposing developers, brokers, and platforms to potential liability. He warned that short-termism and splits between business interests within the crypto industry could weaken legislative protections, delaying or preventing the bill from passing. Galaxy Digital researcher also said that if the bill is not submitted to the Senate for consideration before May, its chances of being passed this year are nearly gone.

Crypto lobbying groups have said they are prepared to address regulatory risks through legal avenues. Van Valkenburgh said that if the bill dies, the industry will be forced into multi-front battles in court while also facing the challenges created by a lack of legislative oversight. Senator Cynthia Lummis, who supports the bill, emphasized that it would provide the strongest protections ever for decentralized finance and developers; she urged Congress to pass the legislation as soon as possible to ensure long-term safety.

However, divisions within the cryptocurrency industry may become a key factor in blocking the bill from passing. Van Valkenburgh warned that if the industry fails to unite, the consequences of the “Clarity Act” failing would fall to future administrations, and future regulators may be more inclined to hold parties strictly accountable. The SEC’s regulatory direction for cryptocurrencies remains unclear, and the legal status of major assets such as Ripple, Bitcoin, Ethereum, and Dogecoin could be affected as a result.