The Digital Asset Market Clarity Act, widely promoted as comprehensive crypto legislation, is facing sharp criticism from legal scholars and industry observers who argue the bill is fundamentally misaligned with cryptocurrency's original purpose of enabling peer-to-peer transactions without intermediaries.

Market Context

Congress has punted action on the Clarity Act until mid-September, leaving the crypto industry's legislative fate uncertain despite Republicans controlling both chambers and the White House. The bill has already missed its July 4th target date and a pre-August recess timeline that advocates once promoted as achievable.

Hermine Wong, a lecturer at UC Berkeley School of Law, published an opinion piece this week arguing that the Clarity Act is built around exchanges, brokers, custodians and other intermediaries rather than the underlying technology itself.

Analysis

"Crypto was supposed to remove middlemen," Wong wrote in CoinDesk. "The combination of cryptography with the ubiquity of the internet could safely replace those points of failure with peer-to-peer transactions."

In her analysis, only 2–4% of the Clarity Act's language focuses on underlying technology, while 44–77% centers on intermediaries—a range that varies across the House-passed bill, the Senate Agriculture Committee draft, and the Senate Banking Committee draft.

"It's as if Congress were to propose its first 'medicine' bill but rather than establishing any requirements for proof of effectiveness, testing and safety, or labeling, Congress spent most of its ink on how Walmarts and CVSs could sell to us," Wong argued.

The political dynamics around the legislation reveal concentrated industry influence. The crypto industry raised over $200 million during the 2024 election cycle, with three businesses—Coinbase, a16z, and Ripple—accounting for more than 80% of those funds, according to Wong's analysis.

"A concentrated group of about 40 crypto businesses and wealthy individuals supplied all the funds," she wrote. "The industry's largest intermediaries funded the political machine."

Despite that spending—including $40 million deployed against Sen. Sherrod Brown (D-OH) and $10 million against former Rep. Katie Porter (D-CA)—Republicans have failed to advance the crypto market structure bill.

"This should be surprising," Wong noted. "Crypto super PACs spent over $100 million to elect a pro-crypto Congress in 2024."

The current strategy, she argues, allows Republicans to schedule a procedural vote on whether the Senate will even consider the bill—a measure widely seen as doomed based on congressional math—while positioning it as both an escape from responsibility for failure and a political scorecard.

"Ignore who controls the committees. Ignore who controls the congressional calendar. Ignore who controls the House, Senate, and White House," Wong wrote. "My bet here is that the crypto super PACs will be just fine with this."

Key Numbers

- 2–4% of Clarity Act focuses on underlying technology, per legal analysis

- 44–77% of bill centers on intermediaries (exchanges, brokers, custodians)

- $200 million+ raised by crypto industry during 2024 election cycle

- Three entities—Coinbase, a16z, and Ripple—supplied over 80% of those funds

- Crypto super PACs have accumulated a reported $190 million war chest for future elections

- $0 spent on Republican attack ads despite bipartisan rhetoric; all attack ad spending targeted Democrats

What to Watch

Congress returns in mid-September with only 14–16 legislative days before the midterm elections, creating limited windows for action. Both chambers face reconciling continuing resolutions to avoid a government shutdown—a priority that could further crowd out crypto legislation.

Wong argues Democrats could craft alternative legislation protecting crypto's technology rather than its middlemen, potentially appealing to young male voters who disproportionately hold cryptocurrency and remain disillusioned with both parties.

"Too many Democratic responses to crypto legislation have centered on Donald Trump and ethics," she wrote. "An ethics amendment is not a technology policy."

The upcoming procedural vote in the Senate will test whether the industry-backed bill can even secure floor consideration, with observers watching closely for how super PAC war chest funds get deployed ahead of the midterm cycle.