Brookings Fellow Warns Clarity Act May Lead to 'Regulation in Name Only'

According to ME News, on May 29 (UTC+8), Aaron Klein, a researcher at the Brookings Institution, stated on the program The Policy Protocol that if the Clarity Act expands the authority of the U.S. Commodity Futures Trading Commission (CFTC) to regulate crypto assets without providing corresponding personnel, budget, or expertise, it could lead to “regulation in appearance but lacking substantive oversight.” Klein noted that the CFTC was originally designed for futures markets and is ill-equipped to handle the scale of the proposed crypto regulation, adding that the agency’s regulatory capacity has weakened in recent years due to staff attrition and structural changes. Reflecting on experiences from the Dodd-Frank era, he warned that fragmented and overlapping regulatory jurisdictions often result in delays and regulatory gaps, expressing concern that similar issues could arise in crypto and prediction markets. He also criticized political interference in financial regulation and advocated for stronger collaboration between the CFTC and the SEC, suggesting that in the long term, merging the two agencies should be considered. (Source: PANews)