“Recipe for Disaster”: PIABA Pans Crypto Bill for Failure to Protect Consumers

CLARITY Act must maintain state enforcement rights, regulatory parity, and core investor safeguards.

WASHINGTON, DC – SEPTEMBER 9, 2026 – The Public Investors Advocate Bar Association (PIABA) condemned the most recent iteration of the Clarity Act, following recent reports of a compromise between the Trump administration and Congress to address corruption and self-dealing. In a July 20th letter addressed to U.S. Senate leadership, PIABA expressed strong concerns regarding the proposed digital asset market structure legislation, specifically calling on lawmakers to ensure the legislation prioritizes retail investor protections and safeguards the vital role of state regulators.

According to PIABA, the current text of the bill does not include sufficient consumer safeguards, leaving everyday investors—particularly retirees and older Americans—vulnerable to severe financial harm and market fraud.

Michael Bixby, president of PIABA and managing attorney for Bixby Law PLLC, issued the following statement:

 The current version of the Clarity Act fails to include the basic consumer protections needed to adequately protect American retirees. If Congress does not get Digital Asset Market Structure legislation right, American consumers will continue to be victimized out of billions of dollars of their savings every year from fraud and direct theft by sophisticated international criminal organizations. 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.

 Congress cannot wait for a cataclysmic market crash to include consumer protections in Crypto market structure legislation. Banks, brokerage firms, and Registered Investment Advisers have been subject to these types of consumer protections for nearly 100 years, and there can be no excuse to justify exempting Crypto market participants from the same types of basic protections.

 Joe Wojciechowski, president-elect of PIABA and managing partner for Stoltmann Law Offices, P.C. PLLC, added:

 Preserving States’ rights to enforce anti-fraud, licensing, and regulatory requirements goes hand-in-hand with a robust investor-protection focused approach to crypto markets. The States have maintained a critical role in investor and consumer protection since long before the federal securities laws even existed. Basic concepts of federalism dictate that States must retain their own enforcement and regulatory sovereignty over the digital asset market.

In its letter, PIABA outlined critical priorities for Senate consideration:

  • Preserving State Anti-Fraud and Enforcement Authority: State securities regulators serve as the frontline defense against investment scams, elder financial exploitation, and fraudulent online schemes. PIABA urges Congress to include a clear, robust savings clause confirming that nothing in the CLARITY Act limits the anti-fraud, investigative, or enforcement authority of state securities regulators.
  • Maintaining Regulatory Parity (Section 505): PIABA strongly supports retaining Section 505 of the CLARITY Act, which ensures that tokenized financial instruments are treated with the same regulatory standards as traditional securities. A security should not lose critical investor protections simply because it is transferred or issued on a blockchain.
  • Protecting State Registration and Licensing: State licensing and registration laws act as an essential gatekeeping mechanism to screen out dishonest, unqualified, or previously disciplined individuals before they can access investor funds. PIABA opposes any provisions that preempt or weaken state licensing authority.
  • Preserving the Investment Contract Standard: PIABA cautioned against narrowing or altering the established legal definition of an “investment contract.” For decades, this flexible framework has enabled regulators and courts to adapt to new and evolving fraud schemes. Restricting it would create dangerous loopholes for bad actors.
  • Limiting Sweeping Exemptive Authority: PIABA opposes delegating broad exemptive power to federal regulatory agencies that could be used to unilaterally preempt state protections without transparent rulemaking and congressional oversight.

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ABOUT PIABA

Public Investors Advocate Bar Association is an international, not-for-profit, voluntary bar association of lawyers who represent claimants in securities and commodities arbitration proceedings and securities litigation. The mission of PIABA is to promote the interests of the public investor in securities and commodities arbitration, by seeking to protect such investors from abuses in the arbitration process, by seeking to make securities arbitration as just and fair as systemically possible and by educating investors concerning their rights. For more information, go to www.piaba.org.

MEDIA CONTACT:  Max Karlin at (703) 276-3255, mkarlin@hastingsgroupmedia.com.