By Robert Reich

(Former U.S. Treasury Secretary)

I’m sorry to say that several Democratic senators appear willing to support the CLARITY Act—a sweeping pro-crypto bill that will be voted on next week. All they’re demanding is that Republicans agree to a few cosmetic changes such as a slight toughening of ethics rules, a modest expansion of law-enforcement authority, and a tad-bit strengthening of financial regulators.

All worthwhile improvements, but they don’t cure the bill’s fundamental defects.

Let me get right to the point. Congress should not enact legislation that further legitimizes and expands an industry whose promised public benefits are zilch while its costs and risks are increasing by the day.

There’s simply no legitimate use for crypto. Its only practical uses are tax evasion, money laundering, fraud, speculation, and crime.

The crypto lobby is large and well-financed. It has already bought off many members of Congress including, sad to say, a number of Democrats.

There’s no lobby on the other side to guard small investors who are losing their shirts on crypto, or to guard the public against the crime, money laundering, and human trafficking that crypto facilitates.

The crypto lobby says blockchain technology and digital assets will foster innovative companies, create new payment systems, strengthen small businesses, generate wealth, and expand opportunities for younger Americans.

Bullsh*t. There’’s no evidence of these benefits. Even if crypto did any of these things, crypto’s costs and risks significantly exceed them.

Aren’t Trump’s crypto conflicts of interest evidence enough? Isn’t the Ponzi scheme he created sufficient proof of how many people will get snookered?

The CLARITY Act would narrow the authority of the Securities and Exchange Commission over digital assets and give authority over crypto to the Commodity Futures Trading Commission.

This means investors will be shafted and the public will be left in the dark because of the lack of disclosures, the absence of fiduciary obligations, and the deficiency of investor safeguards. All these would apply under federal securities law; but none of these exist under laws governing futures contracts.

In other words, the CLARITY Act would give crypto even more cover. It would make crypto even more opaque. It would allow even more tax evasion, more money laundering, more fraud, more speculation, more ripoffs, and more crime.

I have no hope for Republican politicians. They’ve already sold their souls to Trump and the crypto lobby. But shame on any Democratic senator or representative who votes for this abomination.

It’s well worth your time to phone your senators and representative and tell them NO to the “Clarity Act.” The congressional switchboard is (202) 224-3121. You can call this number to be directly connected to the office of your specific senators or representative.

The vote is next week.