Tesla and Meta use CLARITY and asset tokenization to evade regulation? The House of Representatives will review three major crypto bills on July 14

Democratic Senator Elizabeth Warren at the Senate hearing on 7/9 publicly called out large tech companies like Meta and Tesla, warning that they might exploit the Digital Asset Market Structure Act 《CLARITY Act》 to circumvent SEC regulation through "asset tokenization".

《CLARITY》 and 《GENIUS》 Both Questioned by Warren, Meta and Tesla Called Out Again

Warren stated that while she supports establishing clearer regulatory guidelines for digital assets, she has concerns about the upcoming "Digital Asset Market Structure Act" 《CLARITY Act》, believing it might allow non-crypto companies to circumvent securities laws through asset tokenization. She warned:

"With this act, as long as large publicly listed companies like Meta or Tesla tokenize their stocks, they can immediately escape SEC regulation - this is a serious problem for our country!"

Warren again questioned Meta, as they previously launched their stablecoin Diem, and might now potentially influence legislation through the "Stablecoin Act" 《GENIUS Act》 to benefit themselves, creating a potential conflict of interest.

(Meta's Stablecoin Diem Becomes Focus of 《GENIUS Act》 Controversy, Democrat Warren: Zuckerberg Stepping In)

Three Crypto Bills to Be Reviewed in House Before 7/14

It is confirmed that the U.S. House will simultaneously review three crypto bills starting 7/14:

1. "Digital Asset Market Structure Act" 《CLARITY Act》

2. "Stablecoin Act" 《GENIUS Act》

3. "CBDC Anti-Surveillance State Act"

These three bills are seen as Republican "crypto reform" and have been questioned by Democratic members and policy experts

(Trump Calls: House Quickly Pass Stablecoin Act 《GENIUS Act》, No Delays!)

Ripple CEO Calls for Accelerating Regulatory Framework

At the hearing, Ripple CEO Brad Garlinghouse was also invited to provide testimony.

He noted that approximately 55 million Americans use crypto, with a total market value of $3.4 trillion, emphasizing the need for a smart and clear regulatory framework:

"To realize the potential future of cryptocurrencies, a market structure regulatory framework is essential. We've been waiting too long."

Former White House Chief Ethics Lawyer Also States Officials Should Not Hold Crypto and Legislate

Former White House Chief Ethics Lawyer Richard Painter, invited by Warren, emphasized:

"If you want to regulate the crypto industry, you should not simultaneously hold crypto assets."

Painter believes that conflicts of interest between officials and crypto assets would severely undermine the credibility of legislation and enforcement.

Warren and Painter Call Out Trump for Loosening Legislation and Corruption in Crypto

Warren and Painter also publicly called out U.S. President Donald Trump, accusing him of being closely tied to the crypto industry, and stating that Republicans are essentially "catering to crypto industry lobbying" - not only loosening legislation but also refusing to address Trump's corruption in the crypto space.

She specifically pointed out that Trump not only launched a personal meme coin TRUMP but is also involved in crypto through his family business World Liberty Financial. According to a Bloomberg report on 7/2, the Trump family's assets have surged by $610 million through crypto investments in recent months, sparking intense discussions about "policy and property interest conflicts" within Congress.

(Democrats Plan Collective Walkout! Protesting Trump's Support for Crypto Policy, Crypto Hearing May Be Boycotted)

Recently, the topic of token securitization has been hotly debated. SEC Commissioner Hester Peirce, nicknamed the "crypto mom", stated that blockchain technology has opened up a new mode of issuing and trading securities in "tokenized" form, but tokenized securities are still securities. Therefore, market participants must consider and comply with federal securities laws when trading these instruments. She called on market participants to meet with SEC staff, and the SEC is prepared to cooperate, potentially "establishing appropriate exemption clauses and updating related rules" if necessary.

Tokenization Trend Sweeping the Market

Robinhood announced the launch of equity token services in the EU, offering over 200 US stock tokens with all-day trading from Monday to Friday. However, the first wave of tokens featuring companies like "SpaceX" and "OpenAI" has raised licensing disputes and regulatory attention.

(OpenAI Refutes Robinhood: Are Token-Ized Private Equity Investments or Prediction Markets?)

US exchanges Coinbase and Kraken have also expressed strong interest. Swiss crypto startup Backed Finance's xStocks tokens and Ondo Finance's Global Markets platform are gradually being revealed, suggesting that the capital market is entering an on-chain era.

Traditional Financial Companies Issue Warnings About Tokenization

Traditional financial companies have issued warnings about tokenization. The Securities Industry and Financial Markets Association (SIFMA), representing broker-dealers, investment banks, and asset management companies, warned in June that the SEC should not quickly approve requests for digital asset companies to trade tokenized securities.

One concern is that digital asset companies might bypass Know Your Customer (KYC) and Anti-Money Laundering (AML) securities-related regulations.

SIFMA emphasized that such significant structural changes should be considered and implemented through a transparent public process, allowing public knowledge, commentary, oversight, and broad industry participation to help the committee and public fully understand the policy implications of such changes.

Tokenization Still Requires Compliance with Securities Laws, But Appropriate Exemption Clauses May Be Established

SEC Commissioner Hester Peirce, nicknamed the "crypto mom", made a statement that drew attention because, as the chair of the SEC's crypto working group, she has been considered an opponent of regulations hindering the crypto industry's development.

Peirce acknowledged the concept of "tokenization" enabled by blockchain technology, believing it can promote capital formation and enhance investors' ability to use assets as collateral. However, despite blockchain technology's powerful functions, it lacks the magical ability to change the nature of underlying assets. Tokenized securities remain securities. Therefore, market participants must consider and comply with federal securities laws when trading these instruments. Although blockchain-based tokenization is new, the process of issuing securities-representing tools is not. Both on-chain and off-chain versions of these tools are subject to the same legal requirements.

She called on market participants to meet with SEC staff, and the SEC is prepared to cooperate, potentially "establishing appropriate exemption clauses and updating related rules" if necessary.

After the US Independence Day holiday last week, the stock market resumed normal trading, quickly compensating for the volatility caused by the shortened holiday, demonstrating strong resilience. Despite multiple negative expectations, the market welcomed an optimistic July start, further consolidating the Bull's confidence. The non-farm employment data released on Friday far exceeded market expectations. While previous estimates anticipated only about 110,000 new job opportunities, with some Wall Street rumors even predicting as low as 95,000, the actual result reached 147,000, and the unemployment rate unexpectedly dropped to 4.1%, lower than the expected 4.3%.

The pessimistic view about wage increases causing inflation has dissipated, with the expected average hourly wage increase from 0.3% to 0.4% actually only rising by 0.2%, which alleviates market concerns about wage-driven inflation (Note: Rising labor costs are typically seen as a threat to small and medium enterprises and can lead to price increases). Overall, although the data shows a moderate slowdown in the labor market, the market's initial expectations were worse, which instead sparked optimistic sentiment. The following insights are from market observations by senior US stock market analyst Geoff Bysshe, with key points summarized below.