After the U.S. Senate failed to advance the CLARITY Act, foreign media cited Albert Castellana, CEO of GenLayer Labs, stating that regulatory uncertainty may not halt cryptocurrency companies from developing products, but could lead the industry to rely more heavily on custodians, restricted front-ends, and centralized control.
The bill is stuck in procedural voting.
The vote resulted in a 50-to-49 outcome, falling 10 votes short of the 60 needed to initiate formal debate, thereby temporarily shelving the proposed framework for the cryptocurrency market structure. Under the proposal, the Commodity Futures Trading Commission would oversee eligible digital commodities and spot intermediaries, while the Securities and Exchange Commission would continue regulating assets and transactions subject to securities laws.
The report mentions that the bill also addresses decentralized software developers, stablecoin incentives, government ethics, and prediction market contracts. Castellana believes that if rules fail to distinguish who truly holds control, businesses are more likely to opt for centralized structures that are easier to interpret under the law.
Enterprises may shift toward greater intermediation.
Castellana believes that the key to identifying regulated entities should not be whether a project is decentralized, but rather who has the actual ability to freeze funds, block transactions, modify rules, or override outcomes. Whoever can enforce changes to results is closer to the party that should be regulated.
In his view, developers releasing code does not equate to controlling the protocol; running a single validation node or holding governance tokens does not necessarily determine the flow of funds and transactions. Conversely, control becomes more defined if the frontend is controlled by a company or if the network retains administrator keys that can rewrite rules.
He warned that, in the absence of clear regulation, companies often gradually increase the number of custodians, restrict access for U.S. users, or retain administrative privileges. Individually, each step may seem reasonable, but collectively, they ultimately rebuild the intermediary system that the cryptocurrency industry originally sought to reduce.
Stablecoins are clearer; DeFi still needs answers.
Castellana stated that the GENIUS Act has provided clearer reserve and redemption requirements for payment-oriented stablecoins, making the rules for stablecoins themselves more defined. However, once stablecoins enter DeFi, custodial products, self-custody wallets, or trading applications, businesses still face the question of whether they are simply providing software or acting as intermediaries.
He believes that current regulatory developments are more focused on clarifying the nature of money itself, rather than the application-layer economic activities built around these currencies. Recent actions by the U.S. Securities and Exchange Commission regarding tokenized securities also suggest that regulation may advance through incremental measures rather than through comprehensive legislation all at once.
Bitwise Chief Investment Officer Matt Hougan offered a relatively muted assessment of the market impact, describing the vote outcome in a client memo as more of a “speed bump” than a “roadblock.” Nevertheless, the short-term market reaction was still pronounced: BTC fell 3.7%, ETH dropped 5.2%, XRP declined 7.3%, and total market-wide liquidations reached $669 million.
AI agents also point to issues of control.
Castellana also extended the same standard of accountability to AI agents. He argued that responsibility does not disappear simply because an AI agent performs actions such as moving funds, entering into agreements, or initiating transactions on behalf of a company or individual.
According to him, future automated agents may participate in the execution of numerous agreements, with disputes centering on whether work was completed, whether quality standards were met, or whether terms were violated. GenLayer is developing a mechanism that enables agents to establish terms, evidence standards, and collateral requirements before reaching an agreement; in the event of a dispute, independent verifiers will assess the evidence and allow parties to raise objections.