CLARITY Act failure could rebuild crypto middlemen: GenLayer CEO

A 50–49 Senate vote that stalled the CLARITY Act has raised the risk that crypto companies will rely on more custodians and permissioned systems, according to GenLayer Labs CEO Albert Castellana.

GenLayer Labs CEO and co-founder Albert Castellana told crypto.news that the Senate result was disappointing because the proposal had been moving toward a principle he considers important: regulation should follow control.

Entities that hold customer funds, decide who may transact, or stand between two parties perform a different role from developers who publish software or users who join an open network, according to Castellana.

Without rules that recognize the difference, he said companies may respond by adding custodians, restricting access or placing another intermediary between users and blockchain applications.

“Every one of those decisions can look reasonable on its own. But you do that enough times, and suddenly you’ve rebuilt most of the intermediaries crypto was supposed to get rid of.”

CLARITY Act failure could encourage centralized safeguards

The Senate voted 50–49 against invoking cloture on H.R. 3633, leaving the proposal 10 votes short of the 60 required to open formal debate.

As crypto.news previously reported, the failed motion blocked immediate consideration of a framework that would divide oversight between the Securities and Exchange Commission and the Commodity Futures Trading Commission.