The SEC is said to have hampered Democrats’ demands the night before Clarity Act Hearings, while providing analysis to GOP

The hearing on the digital asset market clarity law took place on June 4, 2025. The bill is a bipartisan law that clarifies the market structure of digital assets. Before the hearing, Democrats accused the Securities and Exchange Commission of withholding tax from them, whilst offering it to Republicans. Will political tensions lose innovation?

“Worst Technical Assistance Briefing”

The SEC was thought to provide consultation to the House members prior to the hearing. However, they were removed from proper support, according to House Democrats whose names have not been revealed. Coindesk has proven that Crypto Task Force’s Landon Zinda was chosen to provide consultation to Democrats, but is ultimately not ready to answer basic questions, despite allegedly being sent in advance. Several Democrat staff members called the meeting “the worst technical assistance briefing.” One of the staff members said:

“This felt like they were trying to hide the ball. Some of them clearly didn’t understand the question, others refused to answer by asserting their privilege.”

Democrats claim that GOP members have received personal, detailed written analysis from the SEC.

Democrats fear that the Clarity Act could minimize the level of control of the SEC in crypto space, creating additional risks for consumers, and creating loopholes that allow traditional financial companies to escape SEC oversight as a cryptocurrency business.

What is a clear act?

The law known as the Clarity Act was introduced in May. The bill leads to a series of regulatory efforts aimed at creating a clear regulatory environment for the US crypto sector. The Clarity Act aims to protect consumers, prevent US innovators from fleeing the country, and encourage investors to fund US crypto businesses.

In a May interview with Fox, French Hill lawmakers who introduced the bill gave a brief explanation of the tasks a clear law should resolve. He said America needs stubcoins backed by high standard USD and should be outlined in the bill. Furthermore, the bill must establish a clear framework to distinguish between crypto assets that should be treated as commodities and those that are treated as securities and so on. You need to outline specific regulations for different types of cryptocurrencies. In addition, the Clarity Act will determine rules and methods for Crypto Asset Custody.

During the hearing, there was a serious issue about accountability for non-job platform developers, given the case of prosecution of crypto mixer developers such as Tornado Cash and Samourai Wallet.

read more: DOJ filed charges against Tornado Cash Cofounder Roman Storm ahead of the July 14 trial

Rep. Tom Emmer, co-sponsor of the bill, said that while the bill provides legal certainty for custody entities, it is also important to determine whether non-compulsory platform developers, “people who don’t touch the user’s funds,” are still “confronting potential issues of liability. He then pointed out that if developers are responsible, they may discourage them from working in the US.

Katherine Minarik of Uniswap Labs Clo, who attended the hearing, replied that the non-lawful developers are not responsible as they are not remittancers. She extended the transmitter’s law to a non-corrupted platform, calling it a “deep threat” with a “cold effect” for developers.

Political tensions continue

While the Trump Administration 2.0 has taken a fast pace to rebuild the US crypto space with support from both parties, Democrats and Republicans continue to clash in Congress and the Senate.

Republicans are looking for loose regulations that promote privacy and remove legal burdens that can become an issue of innovation. Uncertainty in cryptography regulation has been a major issue for many years. That led to legal disputes and cancellation of ambitious projects (remember Facebook’s Libra/diary). GOP runs a crypto business in the US and works to make it easier to use cryptocurrency to meet a variety of needs.

The Democrats are more cautious. They present a strict approach when it comes to crypto regulations. They cite citizen protection from fraud and other risks as the reason for this approach, demanding more transparency to prevent the possibility of cryptocurrency use for corruption and prevent more control over the crypto sector in general.

Senate Democrats opposed the main US bill, the Genius Act. The opposition’s reasons are not aversion to stubcoin regulations, but a demand to see if President Donald Trump’s cryptocurrency adventure is legal and deal with conflicts of interest. But after additional work, Republicans were able to convince Democrats to support the bill.

It is not yet clear whether Democrats will make the US safer or slower the transition to global crypto capital. The destiny of a clear act will likely reveal it in the future.

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