SETH ORANBURG: CLARITY Now: Congress Must Bring Truth to Crypto Markets

Just last week,federal authorities announced the takedown of a $37 million international crypto scam that defrauded Americans nationwide. Five men pleaded guilty to running a sophisticated “pig butchering” scheme that lured victims through social media and dating apps, promised safe returns on digital asset investments, then funneled their life savings overseas.

This is not an isolated incident: the FBI reports that crypto scams cost Americans over $6.5 billion last year alone. Congressional inaction exposesmore families to the regulatory void, while legitimate innovators avoid U.S. markets.

Congress finally has a chance to change that. On June 10, the House Financial Services Committee advanced the Digital Asset Market CLARITY Act (H.R. 3633) with bipartisan support, setting the stage for the most significant digital asset reform in U.S. history. The bill, introduced just three weeks ago, is now poised for a full House vote. The stakes could not be higher: the longer Congress waits, the more Americans get crypto scams instead of useful tokens.

Why has American crypto regulation failed for so long? Because our laws are aimed at the wrong target: risk. The optimal amount of risk is not zero, and it’s a mistake to think that we regulate securities because they’re risky. After all, buying Beanie Babies is risky. Buying Kansas farmland is risky. Even getting a law school education is risky (just ask the students worried about AI taking their future jobs). Risk, by itself, isn’t the reason for federal oversight.

What makes securities unique is truth. Securities regulation exists to make truth enforceable in capital markets. In finance, risk is something we know how to price if, and only if, we have reliable information. Disclosures, audited statements, and anti-fraud rules create a legal infrastructure where investors can trust that what they’re told is based on truth. If issuers can lie or hide material facts, risk becomes uncertainty. Markets break down. The entire securities law regime exists not to ban risk, but to ensure that investors can price it.

Some digital assets like Bitcoin defy the logic of securities. Bitcoin has no issuer, no cash flows, no promise to do anything. Speculation drives its price. Such assets are, by design, “truth-agnostic.” Their value isn’t grounded in enterprise facts or future claims. These sorts of tokens function like digital money. We should regulate digital money like money, not like securities.