The US crypto industry got tantalizingly close to regulatory clarity this year. Now it’s watching the whole thing potentially unravel over something that has nothing to do with tokens, exchanges, or blockchain technology: ethics rules.

Josh Riezman, Chief Legal and Strategy Officer at GSR, has flagged unresolved ethics provisions as a primary obstacle preventing the CLARITY Act from advancing. He’s assigned less than 50% odds for the bill’s passage within the current congressional session.

The ethics wall

The CLARITY Act is, on paper, exactly what the digital asset industry has been asking for. It would draw clear jurisdictional lines between the SEC and the CFTC, establish token classification frameworks, and set ground rules for exchanges, custody, and staking arrangements.

Sen. Angela Alsobrooks (D-Md.) stated on June 5 that she will not support the CLARITY Act without a consensus on ethics provisions.

Riezman participated in a discussion on the topic in mid-May, where he highlighted just how precarious the timeline has become. With a June 15 deadline approaching, no notable advancements on the ethics front have been reported.

What the CLARITY Act actually does

The CLARITY Act would give the CFTC explicit oversight over digital commodities. It would also define the securities-versus-commodities distinction. Beyond jurisdiction, the act sets standards for exchanges, addresses trade monitoring requirements, and establishes rules for how customer assets are handled in bankruptcy scenarios.

The bill isn’t emerging from a vacuum. Earlier this year, a bipartisan compromise on stablecoin yield rules was reached between Senate leaders, including cooperation between Sen. Thom Tillis (R-N.C.) and Alsobrooks herself. That deal was hammered out between March and May.

What this means for investors

Without regulatory clarity, US crypto firms continue operating in a gray zone where enforcement actions substitute for actual rulemaking. Jurisdictions like the EU, with its MiCA framework already in effect, and Singapore have moved ahead with clear regulatory structures.

Riezman’s less-than-50% odds assessment should be taken seriously. GSR operates as a major market maker in the crypto space, and its legal chief has direct visibility into the legislative dynamics at play.

Either negotiators find a path through the ethics impasse before the June 15 deadline, or the CLARITY Act joins the growing list of crypto legislation that was always just one more compromise away from becoming law. Alsobrooks’s stated precondition for support is currently the single biggest variable determining whether the US gets a crypto regulatory framework this session.