Coin Center’s Peter Van Valkenburgh warned that a regulatory crackdown on crypto could follow if the CLARITY Act fails. He said rejecting developer protections for short-term gains risks a future ruled by regulator crackdown and political swings. The bill stalled in the Senate over stablecoin yield disputes. Without clarity, future administrations may target privacy-tool developers and undo current guidance.

Advocates warn that failing to pass the CLARITY Act could leave the door open for a future, less industry-friendly US government to crack down on crypto policies, according to Peter Van Valkenburgh, executive director of Coin Center.

In a Friday post on X, Van Valkenburgh argued that rejecting protections for developers in legislation like the CLARITY Act and the Blockchain Regulatory Certainty Act in favor of “short-term business interests” could lead to a grim future for the industry.

“The point of passing CLARITY is not to trust this administration. It is to bind the next one,” he said, adding that “A world without CLARITY’s statutory protections for developers is a world governed by prosecutorial discretion, political fashion, and fear.”

The CLARITY Act stalled in the Senate after banks, crypto firms, and lawmakers failed to agree on key provisions — including whether to allow stablecoin yields. The bill covers a range of measures, including frameworks for registering crypto intermediaries, regulating digital assets and classifying tokens.

During the previous administration, former SEC Chair Gary Gensler drew heavy criticism from the crypto industry for allegedly crafting policy through enforcement actions and legal settlements with crypto firms rather than formal rulemaking.

Nothing set in stone without legislation

Van Valkenburgh also predicts that, without legislative clarity, a future administration’s Department of Justice could ramp up prosecutions of privacy-tool developers as unlicensed money transmitters, and that existing regulatory interpretive guidance could be revoked.

Related: Crypto investor sentiment will rise once CLARITY Act is passed: Bessent

Since Gensler resigned on Jan. 20, 2025, crypto proponents have noted a regulatory shift by the SEC, including the dismissal of several long-running enforcement actions against crypto firms and friendlier guidance on how the agency will treat crypto.

“If we lose this moment because we thought we’d have a bit more revenue and a bit more latitude under the short-term friendly discretion of the current administration, then we lose our way,” Van Valkenburgh said, urging supporters to press for statutory protections that withstand political change.

This article was originally published as Coin Center Warns US Crypto Crackdown Possible Without Clear Rules on Crypto Breaking News – your trusted source for crypto news, Bitcoin news, and blockchain updates.