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Novogratz: Open-Source Rule Blocking Crypto Bill's Path
Polymarket odds on CLARITY Act approval fell from 62% to 48% in June as 60+ industry leaders push back on open-source developer rules. Novogratz cites three obstacles.
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Mike Novogratz laid out three obstacles holding up the CLARITY Act, the crypto market structure bill that has been the industry's main legislative focus this year. The Galaxy Digital CEO told a Washington conference Tuesday that the biggest hang-up is how the bill treats open-source developers.
More than 60 crypto industry leaders signed a letter last week demanding that open-source programmers not receive the same regulatory treatment as exchange platforms. The letter, addressed to House Financial Services Committee leadership, argues that applying broker-dealer rules to developers who write code but never custody customer funds would drive development offshore.
Polymarket bettors have taken notice. The prediction market platform recorded a drop in the probability of CLARITY Act approval this year, descending from 62% to 48% in June. That slide accelerated after the open-source letter went public.
Novogratz identified the second roadblock as a disagreement over how the bill defines a "digital commodity." The current draft carves out Bitcoin and Ethereum but leaves most other tokens in regulatory limbo between the SEC and CFTC. Industry lawyers have told committee staff the ambiguity would produce years of litigation.