House Democrats Accuse SEC of Withholding Critical Details on CLARITY Act

On June 3, Democratic staff members of the U.S. House of Representatives accused the Securities and Exchange Commission (SEC) of withholding critical technical analysis of the CLARITY Act, a proposed cryptocurrency bill aimed at clarifying regulatory frameworks for digital assets. The allegations, described by one staffer as “truly infuriating,” have sparked frustration among Democrats, who claim the SEC provided relevant information to Republican counterparts but not to them, fueling concerns about transparency and fairness in the legislative process.

SEC Briefing Sparks Democratic Outrage

The controversy stems from a technical briefing conducted by the SEC to discuss the CLARITY Act, a bill designed to provide regulatory clarity for cryptocurrencies by delineating the roles of the SEC and the Commodity Futures Trading Commission (CFTC) in overseeing digital assets. According to a Democratic staffer, SEC representatives failed to address pre-submitted questions during the briefing, leaving key technical concerns unanswered. The staffer further alleged that the SEC shared a standard technical analysis of the bill with Republican staff but withheld it from Democrats, prompting accusations of partisan bias.

In response, an SEC spokesperson stated that the agency is committed to assisting any congressional member seeking technical support, including on issues related to cryptocurrency legislation. However, according to Decrypt, when pressed on specific allegations from House Democrats—who claimed their request for written technical assistance on the CLARITY Act was denied—the spokesperson did not immediately respond.

A Democratic staffer expressed frustration with the SEC’s alleged actions, stating, “It’s a stark departure from how the agency has ever worked with respect to written technical assistance. This is supposed to be completely apolitical.”

Background on the CLARITY Act

The CLARITY Act, introduced earlier this year, seeks to resolve long-standing ambiguities in U.S. crypto regulation. It proposes a framework to determine whether digital assets qualify as securities under SEC jurisdiction or commodities under CFTC oversight, a distinction critical for projects like altcoins, which have faced scrutiny over their regulatory status. The bill has garnered bipartisan support in principle, as both parties recognize the need for clear rules to foster innovation while protecting investors.

The CLARITY Act is scheduled for a hearing before the House Financial Services Committee on June 4, with floor consideration set for June 10. The Democrats’ accusations regarding the SEC’s handling of the bill’s technical briefing surfaced just one day before the hearing. These claims, which suggest the SEC may have provided unequal legislative support to the two parties, could undermine bipartisan cooperation and hinder the bill’s progress during the hearing.

This is not the first time the CLARITY Act has faced bipartisan challenges. At a joint hearing on May 7, titled “American Innovation and the Future of Digital Assets,” held by the House Financial Services and Agriculture Committees, discussions on the CLARITY Act were planned. However, concerns over potential conflicts of interest tied to the Trump family’s crypto business led Democrats, including Sen. Elizabeth Warren, to boycott the hearing.

Broader Context and Next Steps

The CLARITY Act is part of a broader legislative push, which includes the GENIUS Act, passed via a Senate cloture vote in May 2025, aimed at regulating stablecoin issuers. A corresponding House stablecoin bill, the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE Act), is also advancing, with lawmakers targeting passage by August 2025. The interplay between these bills underscores the U.S.’s determination to catch up with global jurisdictions that have already implemented crypto regulations.

The June 10 markup marks a critical juncture for the CLARITY Act, where amendments will be discussed. Industry stakeholders, including Coinbase’s Greg Tusar, have called the bill a “strong step” toward regulatory clarity. While prior bipartisan support offered hope for progress, Democratic concerns over the SEC’s lack of cooperation could heighten political tensions, potentially delaying or derailing the legislation.

House Financial Services Committee Democratic leader Maxine Waters has sent a letter to SEC Chair Paul Atkins, demanding a comprehensive technical and impact analysis of the CLARITY Act by June 6. In her letter, Waters wrote, “I believe that the current Commission’s expert analysis of the CLARITY Act and fulsome answers to the questions raised above are necessary for the American people, through their representatives in Congress, to determine whether this legislative proposal addresses the unique risks related to crypto, and would foster the needed environment for responsible innovation to take root.”