Brookings scholars warn of the risks of the CLARITY Act, suggesting the US CFTC may face a lack of substantive oversight.

According to ME News, on May 29 (UTC+8), Aaron Klein, a scholar at Brookings Institution, warned that the U.S. Commodity Futures Trading Commission (CFTC) may face insufficient regulatory capacity when expanding its regulatory powers over digital assets as Congress deliberates on digital asset legislation. Klein pointed out that the CFTC was initially established to regulate the commodity futures market and was not designed for the scale of its responsibilities under the current proposed crypto regulations. The lack of additional personnel, funding, and professional capabilities could lead to a situation of "regulatory power without substantive oversight." Recent staff losses and organizational restructuring within the CFTC have weakened its regulatory capacity, and expanding its responsibilities could repeat the regulatory failures of the past financial crisis. If crypto regulatory responsibilities are dispersed among multiple agencies, delays and confusion may occur, repeating the enforcement shortcomings of the Dodd-Frank era. Klein criticized accusations of political influence on financial regulation, emphasizing that enforcement should be independent of the White House or political figures, and called for increased accountability and prevention of financial misconduct. He suggested that the SEC and CFTC should strengthen coordination, and possibly even merge, to improve the efficiency of digital asset and prediction market regulation; in the short term, sharing office space could improve collaboration more effectively than a formal agreement. (Source: ME)