By Lina Irawan 
For generations, the bedrock principle of thriving markets has been clear and consistent rules. Entrepreneurs, from fledgling startups to established titans, can only build with confidence when the parameters of engagement are well-defined. Similarly, institutional investors, responsible for vast sums of capital, can only deploy resources effectively when the regulatory landscape is predictable and transparent. Crucially, consumers benefit immensely from a system where all participants operate under a universally understood code of conduct, ensuring protection against fraud, manipulation, and undue risk. In stark contrast, America’s burgeoning digital asset sector, home to some of the world’s most innovative minds building the next generation of financial infrastructure on decentralized ledgers, has been forced to navigate a regulatory labyrinth. This framework, if it can even be called that, has been largely characterized by reactive lawsuits and enforcement actions rather than proactive, comprehensive legislation.
This untenable situation benefits no one. It profoundly disadvantages investors, who face unpredictable market conditions and uncertain legal recourse. It stifles innovation, as companies are hesitant to invest heavily in a jurisdiction where the rules can change overnight or are interpreted differently by various agencies. Most critically, it erodes American competitiveness on the global stage. While the United States remains mired in circular debates and protracted regulatory indecision, other nations are aggressively moving forward, establishing clear frameworks and attracting the very talent and capital that once defined America’s technological prowess.
Each day Congress delays action sends an unmistakable signal to the global community: America is content to export not only the next wave of financial innovation but also the high-paying jobs, economic growth, and strategic leadership that inevitably accompany it. The CLARITY Act is not merely a "crypto bill" in the narrow sense; it is a foundational piece of legislation that will determine whether the United States will lead the future of global finance or passively observe as other nations seize the mantle.
The urgent need for regulatory clarity in the digital asset space has been a consistent refrain from industry leaders, legal experts, and even some government officials. For years, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have often appeared to be at odds over jurisdiction, leading to a "regulation by enforcement" approach that has created more confusion than guidance. Landmark cases, such as the SEC’s protracted legal battle with Ripple Labs over XRP’s classification, and the catastrophic collapses of FTX and Terra/Luna, underscore the severe consequences of this regulatory vacuum. These events, while tragic for investors, served as stark reminders of the imperative for a coherent legal framework that delineates responsibilities, establishes investor protections, and fosters market integrity. The current environment has inadvertently driven innovation offshore, with companies choosing to establish operations in jurisdictions like the European Union, the United Arab Emirates, Singapore, and the United Kingdom, all of which have moved faster to implement comprehensive digital asset frameworks. The EU’s Markets in Crypto-Assets (MiCA) regulation, for instance, provides a clear blueprint for crypto companies operating within its member states, offering a level of certainty that US firms can only dream of.
It is crucial to acknowledge that the concerns surrounding the legislation are legitimate and deserve serious consideration. As a vocal critic of former President Donald Trump since my brief tenure in his White House, I hold a firm belief that elected officials and their immediate families should be held to the highest ethical standards. This includes abstaining from issuing cryptocurrencies, promoting speculative meme coins, or engaging in any activities that create even the appearance of profiting from public office. Indeed, my personal conviction extends even further, suggesting that lawmakers should refrain from trading individual equities altogether—though that is a broader battle for another day. The fundamental principle at stake is public trust, which is the bedrock of any functioning democracy and financial system, and robust ethics rules are indispensable to maintaining it.
Democrats, in their role as guardians of public integrity, were entirely justified in insisting that these legitimate ethical concerns be addressed within the framework of the CLARITY Act. Over the course of arduous negotiations, a significant bipartisan achievement unfolded: Republicans and the White House conceded to and accepted ethics provisions that would have been deemed politically unfeasible just months prior. This willingness to compromise, to seriously engage with and incorporate valid criticisms, demonstrates precisely how effective, bipartisan lawmaking is meant to function. The legislative process, at its best, is an iterative journey of debate, refinement, and concession, ultimately yielding a stronger, more equitable outcome.
However, the conversation has, regrettably, shifted once again. The debate is no longer centered on the adequacy of the CLARITY Act’s ethics provisions specifically pertaining to digital assets and public officials. Instead, a new and potentially derailment-inducing demand has emerged: that this critical market structure bill should also serve as the vehicle for a wholesale rewriting of the broader framework governing federal ethics law.
These are, unequivocally, two distinct and separate conversations. While the need for strengthening broader federal ethics laws is a valid and important discussion, attempting to tack such an expansive and complex reform onto a bill specifically designed to address digital asset market structure is a perilous gambit. No state attorneys general, for instance, possess jurisdiction over federal ethics laws, and attempting to fundamentally alter this established paradigm now would mean squandering the most significant chance America has to cement its position as the undisputed home of financial innovation for decades to come.
If members of Congress genuinely believe that existing federal ethics laws require strengthening, I wholeheartedly concur. Indeed, Congress should proactively and comprehensively strengthen them. This should involve tightening conflict-of-interest rules, enhancing disclosure requirements for all financial holdings, and critically, revisiting insider trading laws to ensure they are robust and applicable in the modern financial landscape. Most importantly, any such reforms must be applied consistently and equitably across all asset classes—stocks, private businesses, real estate, and digital assets alike—to avoid creating loopholes or unfair advantages.
However, it would be an act of profound strategic shortsightedness to hold America’s burgeoning financial and technological future hostage while attempting to resolve every intricate ethics question plaguing Washington through the singular lens of a market structure bill. This approach is not only impractical but also deeply counterproductive.
Historically, no major piece of legislation has ever been expected to solve every single problem confronting Congress before it could garner enough support to pass. The CLARITY Act should not be subjected to an unprecedented and unfairly elevated standard simply because the underlying technology is new, or because the political considerations surrounding it are perceived as uncomfortable or challenging. Perfection, in the realm of legislative compromise, is an elusive and often destructive ideal when it becomes the enemy of significant progress.
Some stakeholders continue to argue that the current ethics provisions, even with the recent bipartisan enhancements, do not go far enough. Reasonable people can, and often do, disagree about where the precise line of ethical conduct should be drawn. Yet, there inevitably comes a pivotal point in every complex negotiation when the fundamental question transitions from "How can we further improve this bill?" to "Are we willing to let the pursuit of absolute perfection become the enemy of achieving substantial good?" Congress is rapidly approaching that critical juncture.
Meanwhile, the dynamic world of entrepreneurship and global capital markets does not afford the luxury of waiting. Capital, ever fluid and opportunistic, does not pause its search for optimal returns while Washington engages in protracted negotiations. Engineers, driven by innovation and problem-solving, do not cease their development efforts simply because Congress cannot agree on legislative language. Businesses, both nascent startups and established enterprises, make strategic decisions every single day about where to invest their resources, where to create jobs, and where to launch their next generation of products and services. With alarming frequency, these crucial decisions are being made outside the United States, a trend that should provoke deep concern across the entire political spectrum, irrespective of party affiliation.
The current debate surrounding digital assets transcends mere technicalities; it is a fundamental referendum on whether America still genuinely believes that innovation should originate and flourish within its borders. It is about whether the United States intends to proactively write the foundational rules for emerging technologies, thereby shaping their trajectory and impact, or whether it will passively permit other nations to assume that leadership role and dictate the terms for us. Ultimately, this moment also serves as a critical test of whether Congress, in an era of deep polarization, remains capable of forging meaningful bipartisan compromise on issues that are absolutely paramount to our collective economic future and national security.
The CLARITY Act, like all consequential legislation, is not a flawless document. Indeed, true legislative perfection is a mythical ideal. However, it represents a serious, meticulously crafted, and genuinely bipartisan effort to dismantle the suffocating shroud of regulatory uncertainty. It aims to replace it with a clear, predictable, and robust framework of rules, strengthened consumer protections, and an environment that actively encourages innovation to thrive under the protective umbrella of American law, rather than being forced to migrate overseas.
The robust and at times contentious ethics debate surrounding the bill ultimately served to make the legislation stronger and more credible. It compelled lawmakers to confront difficult but undeniably important questions regarding public trust, potential conflicts of interest, and the integrity of public service. However, this essential debate, having achieved its purpose of refining the bill, should not now be weaponized to become the very reason America forfeits its unparalleled opportunity to lead in the defining financial frontier of the 21st century.
Congress must recognize the urgency and the magnitude of this moment. The opportunity to solidify America’s leadership in financial innovation is both immense and fleeting. Therefore, Congress should act decisively and pass the CLARITY Act before this critical opportunity irrevocably slips away.
The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.
Anthony Scaramucci is founder and managing partner of SkyBridge Capital, co-host of The Rest Is Politics US podcast, and author of upcoming book “All the Wrong Moves”.
