Future US Governments Could Crack Down on Crypto Without Clear Rules, Warns Valkenburgh

A future less crypto-friendly US administration could crack down on the industry without clear regulatory frameworks in place, according to Peter Van Valkenburgh, executive director of advocacy group Coin Center.

In a Friday X post, Van Valkenburgh warned that rejecting developer protections in legislation like the CLARITY Act and the Blockchain Regulatory Certainty Act could lead to a “grim” future for the cryptocurrency sector. The warning comes as short-term business interests and political considerations threaten to derail critical market structure bills.

“The point of passing CLARITY is not to trust this administration. It is to bind the next one,” Van Valkenburgh said. He added that without statutory protections, the industry would be “governed by prosecutorial discretion, political fashion, and fear.”

The CLARITY Act, a comprehensive crypto market structure bill, recently stalled in the Senate after banks, cryptocurrency firms, and lawmakers failed to reach an agreement on key provisions. One major sticking point was whether to allow stablecoin yields, a contentious issue that divided industry stakeholders.

The bill covers a range of measures designed to provide regulatory clarity for the digital asset sector, including frameworks for registering crypto intermediaries, regulating digital assets, and classifying tokens. Without such legislation, Van Valkenburgh argues, the industry remains vulnerable to regulatory whiplash.

During the previous US administration, former Securities and Exchange Commission Chair Gary Gensler drew heavy criticism from the crypto industry. Critics accused him of crafting policy through enforcement actions and legal settlements with crypto firms rather than formal rulemaking, creating an uncertain regulatory environment.

See also: CLARITY Act Stalls in Congress, Signaling Positive Turn for Crypto Industry

Van Valkenburgh also predicts that without legislative clarification, a future administration’s Department of Justice could ramp up prosecutions of privacy-tool developers as unlicensed money transmitters. He warned that existing regulatory interpretive guidance could be revoked, leaving developers and businesses in legal limbo.

Since Gensler resigned on January 20, 2025, crypto proponents have seen a regulatory shift by the SEC. The agency has dismissed several long-running enforcement actions against crypto firms and issued friendlier guidance on how it will treat cryptocurrency businesses.

However, Van Valkenburgh emphasized that relying on the “short-term friendly discretion” of the current administration is a dangerous strategy. “If we lose this moment because we thought we’d have a bit more revenue and a bit more latitude under the short-term friendly discretion of the current administration, then we lose our way,” he said.

The Coin Center executive director stressed that failing to secure statutory protections would represent a failure to stand up for the transparency, neutrality, and openness that cryptocurrency represents. “And worse, we will have helped tie the noose ourselves, handing it to the future officials who will be only too happy to pull it tight,” Van Valkenburgh warned.

The urgency of passing legislation like the CLARITY Act has been echoed by other industry figures. Treasury Secretary nominee Scott Bessent previously stated that crypto investor sentiment would rise once the CLARITY Act is passed, signaling a recognition of the need for regulatory certainty.

While some firms may benefit from a more relaxed regulatory approach in the short term, the absence of clear statutory frameworks leaves the entire industry vulnerable to future crackdowns.

Van Valkenburgh’s warning serves as a reminder that regulatory environments can change rapidly with new administrations. Without legislation enshrined in law, any regulatory relief or guidance can be quickly reversed, leaving businesses and developers exposed to legal risks.

The cryptocurrency industry now faces a critical decision about whether to push for comprehensive legislation that provides lasting protections, even if it means accepting some restrictions, or to gamble on maintaining favorable treatment from sympathetic regulators without statutory backing.