cardano

Cardano and Midnight founder Charles Hoskinson says that the Clarity Act, in its current form, is not just incomplete, it is potentially more dangerous than having no legislation at all.

Key Takeaways:
Bad bill is worse than no bill says Cardano founder.Clarity Act built without industry consultation.CFTC has no budget to enforce new mandate.Next administration inherits unfinished rulemaking.Security vs commodity question never properly resolved.NIST should have been the technical tiebreakerTrust collapse is the problem crypto solves.Industry was winning courts without legislation.
The Bill Nobody Built Correctly
Charles Hoskinson has been in this room before. In 2022, during the Biden administration, he sat before Congress and worked through the Financial Innovation and Technology for the 21st Century Act alongside Senators Gillibrand and Lummis. He knows what serious legislative construction looks like. And what he sees in the Clarity Act is not that.
The fundamental problem, Hoskinson argues in a recent podcast, is not the bill's intentions. It is the process that produced it. Serious legislation is not written and then debated, it is pre-decided before it ever reaches the floor. The board meeting is a formality. The real work happens in the months before, when every stakeholder is brought into the room, their concerns are heard, and the coalitions are built quietly. By the time the vote happens, the outcome is already settled.
That process did not happen with the Act. Nobody in the industry received a questionnaire. There was no systematic consultation with the people building the products the law would govern. The people who got meetings, Hoskinson says plainly, were the ones who donated seven and eight figures to the Trump campaign. Political insiders and donors sat on the committees. The industry did not. And you cannot write a law about a technology you have not properly consulted the builders of.
The consequence of that failure is a bill with structural problems that go beyond fixable details.
The CFTC Problem Nobody Is Talking About
The Clarity Act hands the majority of crypto regulation to the Commodity Futures Trading Commission. On the surface that sounds reasonable. In practice, Hoskinson argues, it creates an agency capacity crisis that the bill does not address at all.
The CFTC has never regulated an industry like this. To do it properly, they would need to hire significant numbers of new staff, develop entirely new regulatory frameworks, and build institutional knowledge from scratch. The Clarity Act gives them that mandate. It does not give them the budget to execute it.
What fills that vacuum is not nothing, it is delay, inconsistency, and eventually rulemaking by whoever is in power when the rules finally get written. Hoskinson points to the Consumer Financial Protection Bureau as the precedent. The CFPB was created during the Obama administration. Fifteen years later, they are still making rules. There is no clock in the legislation that forces completion. The same dynamic applies here.
That matters enormously for one specific reason: the next administration gets to finish what this one started. If a Democrat administration inherits an Act with no completed rulemaking, they inherit the pen. They write the rules. And if that administration is anti-crypto, which the Democratic Party was, until they calculated that being anti-crypto cost them the 2024 election, then the meat and potatoes of the Act become the mechanism of the attack. The legislation that was supposed to protect the industry becomes the tool used against it.
This is Hoskinson's core argument, and it is the one most of the industry is not engaging with seriously enough. A bad bill does not just fail to help. It actively removes the legal ground the industry was standing on. Right now, without the Act, court cases are being won on the basis that the law is unclear. Pass a bad one, and that ambiguity disappears, replaced by a legal structure that was designed without the industry's input and will be administered by whoever wins the next election.
The Security Question Nobody Resolved
At the center of the Clarity Act's structural failure is a question it tried to answer and couldn't: what is a security and what is not.
Hoskinson breaks this down with more precision than most coverage of the bill manages. The most contested instrument is the yield-bearing stablecoin. In its current form, it looks like an investment contract, something that, under existing securities law, should be regulated like a security. The Clarity Act attempts to reclassify it as a commodity. The CFTC pushed back, correctly noting that they do not have the experience, mandate, or structure to regulate something that is not really a commodity either.
The correct solution, Hoskinson argues, was never to force the instrument into an existing category. It was to create a new one. A standalone bill updating the Securities Exchange Act of 1933 to include a digital security category, blockchain-native, with disclosure mechanisms built into the chain itself, would have solved the problem cleanly. Yield-bearing stablecoins could exist as a digital security with a Genius Act yieldless component attached. The regulation would be straightforward. The instrument would be viable. Nobody would have to pretend a stablecoin is a commodity.
Instead, the industry bundled everything onto one bus, turned the security question into a wedge issue, and created the exact legislative gridlock that makes the bill both slow to pass and dangerous if it does.
What a Real Framework Looks Like
Hoskinson is not simply criticizing. He has a specific model for how this should have been done, and he has actually executed it at state level, the Stem Cell Freedom Act in Wyoming, passed unanimously, every Democrat and every Republican voting for it, including the state medical board.
The framework is three layers. First, the statutory layer, what the law actually says. Second, the rulemaking layer, who is in the room when the rules get written, and what their mandate is. Third, the industry interface layer, how does the industry engage with regulatory agencies on an ongoing basis? Does it have a self-regulatory organization like FINRA? Does it sit on committees? Or does the government simply mandate down?
All three layers have to be designed before the legislation is drafted. The legislation then gives deference to the rulemaking and industry participation processes that have already been built. By the time it reaches the Senate and the House, the hard work is done. The vote is a formality.
The Clarity Act did none of this. It created a miniature Securities and Exchange Commission inside the CFTC without oversight or additional funding. It provided no clear framework for how the CFTC and SEC coordinate. It made no attempt to align with international frameworks, MiCA in Europe, Abu Dhabi, Dubai, Switzerland, Singapore, Japan, despite the fact that cryptocurrencies are global assets that do not live inside American borders. Hoskinson's assessment is direct: you probably need a treaty. Nobody attempted to write one.
He also points to a specific missing component that could have served as a neutral technical tiebreaker between the CFTC and SEC: the National Institute of Standards and Technology. NIST has been studying blockchain technology, CBDC, and cryptography since at least 2020. They have cryptographers and engineers. They write procurement standards for the US government. They are the entity that, by mandate of the Department of Commerce, defines technical standards for government contracts. Using NIST as a technical arbiter in crypto regulatory disputes would have been logical, bipartisan, and grounded in existing institutional authority. A small NIST provision did make it into the Genius Act, Section 14, but Hoskinson describes it as nowhere near large enough to be meaningful for the bigger conversation.
https://www.youtube.com/watch?v=vRDvNekl12k
The Deeper Problem the Bill Cannot Fix
What sits underneath all of this, and what Hoskinson returns to throughout the conversation, is a trust problem that legislation alone cannot solve.
He frames it through a story about buying a neighbor's land. Two transactions, same facts, same price, same land. One closes in two months over dinner and a handshake. The other takes three years, half a million dollars in legal fees, and ends in a feud that runs for two decades. The only variable was trust. Remove trust from a transaction and you do not just add friction, you transform the entire nature of the interaction.
Extrapolate that to society, Hoskinson argues, and you get the world as it currently exists. Voting systems nobody believes in. Medical advice nobody follows. Institutions nobody trusts. Every authority figure suspect. Every interaction carrying an assumed ulterior motive. A society in permanent distrust does not just function poorly, it eventually stops functioning.
This is where Midnight enters the argument not as a product pitch but as an answer to a structural problem. Zero knowledge proofs allow verification without disclosure. You can prove you are who you say you are without revealing everything you are. You can vote without your vote being traceable. You can transact without exposing your financial history. You can build systems where trust is not assumed between parties, it is mathematically guaranteed. And in a world that has run out of the social infrastructure required to generate trust organically, that mathematical guarantee is not a feature. It is the foundation.
The Clarity Act, even if it passes in its current form, does not address this. It reorganizes regulatory jurisdiction over an industry it does not fully understand, administered by an agency without the resources to do it, written without the input of the people building it, and exposed to reversal by the next administration that decides the rules differently.
Hoskinson's position is not that crypto legislation is unnecessary. It is that bad legislation creates legal infrastructure that gets used against you. And right now, the industry was winning without it.
The Clarity Act is still moving through Congress. The rulemaking has not started. The CFTC budget has not been increased. The international framework has not been consulted. The clock Hoskinson says does not exist is still not running, and that, more than anything else in the bill, is the problem.

#Cardano

Cardano rises today with the market following the opening of the Strait of Hormuz. The biggest macro catalyst of the year has just been eliminated. There are three events that could define the price of $ADA in the coming weeks: the markup of the CLARITY Act this week in the Senate, the expiration of the ceasefire on April 22, and the 4 pending spot ETF applications from Grayscale, VanEck, 21Shares, and Canary Capital.
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💣 BOMB DATA:
$ADA has 4 active spot ETF applications — Grayscale, VanEck, 21Shares, and Canary Capital. The SEC classified it as a digital commodity in March — the regulatory prerequisite for approval has been met. Van Rossem, the hard fork to Protocol Version 11, arrives in June 2026. The network surpassed 120 million transactions. Whale wallets with more than 10 million ADA are at a 4-month high. And with Hormuz open and the CLARITY Act this week, there has never been so much converging catalyst at the same time for Cardano.