Joint Center Senior Fellow Eric Morrissette penned an op-ed which discusses how the CLARITY Act does little to mitigate the risks of investing in cryptocurrency and how this can disproportionately impact Black Americans, who overwhelmingly invest in crypto.
The full op-ed can be found below.
CLARITY for Whom? What the CLARITY Act Means for Black Wealth Creation
For generations, Black Americans have been locked out of the traditional financial vehicles that build and pass down wealth. It is no surprise that many have looked to cryptocurrency for something different, a decentralized market with direct access to capital and no gatekeeper’s approval required. That hope is not irrational. That hope is understandable. But for communities that have already faced so many barriers, the cost of getting it wrong is much higher.
According to the Pew Research Center’s most recent survey, about one in five Black adults has invested in or used cryptocurrency, roughly the same share as adults overall. That should give lawmakers pause. Black households hold far less wealth than white households (Black households hold 15 cents to every dollar of a white household) so the same loss lands harder and leaves far less room to recover. Crypto may offer access, but access without protection is not the same as opportunity.
That is where the CLARITY Act comes in. The bill passed the House in July 2025 and is now moving through the Senate. It would bring more structure to a market that has often operated in a gray area, and that part is worth welcoming. However, the Act offers little clarity on the point that will most impact everyday investors: whether any of this is safe enough to stake our financial future against. As written, the bill does a lot to organize the industry, but not nearly enough to protect the everyday investor who can least afford a loss.
The bill offers real benefits. It sets rules for exchanges, brokers, and dealers. It requires companies to keep customer funds separate so that the bankruptcy of these entities does not wipe out the people who trusted them. It limits insider selling and bars platforms from trading against their own customers. Those are meaningful steps. But they are mostly about structure. The bill is built to sort out who regulates what, not to deal with the sharp price swings where much of the risk to ordinary investors actually lies.
Who serves as the cop on the beat matters, because the regulator shapes the disclosures and protections available to ordinary people. The CLARITY Act gives the Commodity Futures Trading Commission (CFTC) primary authority over the spot markets where people buy and sell assets like Bitcoin, authority the agency has never held, without pairing it with meaningful new resources. The CFTC is not incapable. It was simply built for derivatives and institutional commodities, not for retail investor protection. We would be shifting that work from the more consumer-focused Securities and Exchange Commission (SEC) to an agency whose constituency has long been sophisticated traders, without giving it the budget or mandate to do the job well. It does not appear that they, or everyday investors, are being set up for success.
What the bill leaves out may matter even more. It does not set limits on how much people can borrow to make these trades–a foundational tool that prevents speculative market risks. It does not create circuit breakers or trading halts to stop a bad day from turning into a financial nightmare. It does not require checks to make sure risky products are suitable for everyday investors. That means someone with a few hundred dollars can still buy highly speculative tokens with little more than a disclosure form in front of them. But disclosure is not the same as protection.
The bill also creates a broad exemption for decentralized finance, or DeFi, where financial services run through computer code instead of through a bank or broker. That means the most volatile corner of the market could keep operating with very little direct oversight from federal regulators. Regulators could only step in after the damage was already done. And the risks do not stay inside crypto. The financial crisis and the promises of the Dodd-Frank Act offered clear lessons and warnings–could a major downturn set off by crypto spill into the broader financial system? Analysts at the Office of Financial Research (OFR), an entity created in the aftermath of the financial crisis to prevent future downturns, have assessed this question. They have warned about problems like leverage, runs, concerning entanglement with traditional financial sectors and contagion for years. However, these concerns have not been meaningfully addressed.
The question is not whether crypto should be regulated. It should. The real question is whether the CLARITY Act will protect ordinary investors or simply make a risky market look safer than it really is. There is still time to get that right. For Black families with the least room to absorb a loss, that is what clarity should mean.