Clarity Act a ‘Recipe for Disaster,’ Piaba Says
The advocacy group slammed the crypto framework legislation, saying it lacks basic protections for consumers and investors.
By Alex Padalka|September 10, 2026
The Public Investors Advocate Bar Association has reiterated its criticism of the Clarity Act, currently stalled in the Senate, calling for better protection for investors and more power for states.
The advocacy group in an announcement on Wednesday “condemned” the most recent version of the landmark cryptocurrency bill in light of “recent reports of a compromise between the Trump administration and Congress to address corruption and self-dealing.”
The Clarity Act stalled in the Senate in part over disagreements about ethics provisions, with a key point of contention being the $1.4 billion in crypto profits earned by President Donald Trump‘s family businesses, Bloomberg reported last month.
Piaba in its announcement called for the bill to include a clause confirming that the legislation would not curb state securities regulators’ anti-fraud, investigative or enforcement authority, and it opposed any measures that would undermine state licensing and registration authority, which it called “an essential gatekeeping mechanism to screen out dishonest, unqualified, or previously disciplined individuals before they can access investor funds.”
The group also urged Congress to retain a section of the bill specifying that regulations applicable to traditional securities also apply to tokenized products.
“A security should not lose critical investor protections simply because it is transferred or issued on a blockchain,” Piaba said in the announcement.
The group also warned against narrowing or changing the legal definition of an “investment contract,” which has allowed regulators and courts to keep up with “new and evolving fraud schemes.”
Piaba also said that it’s opposed to unlimited exemptive power being given to federal regulatory agencies, which it said could be used to preempt state protections.
“Failing to include real consumer protections — such as requirements for specific antifraud policies, supervision, and compliance staff and procedures as well as preserving private rights of actions for victimized consumers — is a recipe for disaster that will ultimately undermine any legitimacy of the Crypto markets and set the protection of American consumers back by a decade or more,” Michael Bixby, president of Piaba and managing attorney for Bixby Law, said in a statement.
The Senate is expected to take a key procedural vote on the bill in the middle of this month.
The Securities and Exchange Commission indicated last month that it’s moving forward with setting up a crypto regulatory framework without waiting for Congress, with a proposal to allow exemptions from registration requirements for offerings of investment contracts involving crypto assets under a certain value.
In addition, Commodity Futures Trading Commission Chair Michael Selig told Bloomberg last month that his agency has all the necessary authority to set up a crypto-industry regulatory framework without Congress’ input.