The U.S. Senate is scheduled to vote on the CLARITY Act on January 15th, and this regulatory document could become a key milestone in the development of the crypto market.

The core content of the bill directly addresses the current market’s chronic issues:

First, the phenomenon of false prosperity on exchanges will be prohibited. Schemes of buying and selling to create fake trading volume will no longer work.

Second, price manipulation will be criminalized. Whether it’s placing fake orders to deceive retail investors or exchanges exploiting informational advantages to front-run trades, all will face criminal penalties.

Furthermore, the regulatory mechanism will be upgraded. Moving from post-event accountability to real-time monitoring, any abnormal trading behavior will be exposed.

Finally, mandatory disclosure of reserves will be enforced. Exchanges must regularly publish and undergo audits, effectively preventing the misappropriation of user funds.

Why is this bill worth paying attention to? A review of the market crisis on October 10th last year makes it clear. In just one day, the crypto market experienced over $100 billion in liquidations, with Bitcoin and various tokens suffering a bloodbath. Ironically, no one could clearly identify what triggered the plunge or which large holder caused the chain reaction of liquidations. The entire event remains a confusing account, with no one taking responsibility.

Since then, the trend in the crypto market has become bizarre. U.S. stocks and gold continue to hit new highs, while the crypto market behaves in the opposite manner: good news leads to sell-offs, bad news causes crashes, and each rally is accompanied by sell pressure. Behind this abnormal performance, there are either a complete loss of market confidence or some form of behind-the-scenes manipulation.

The significance of the CLARITY Act lies in this. Once the rules are implemented, large-scale liquidation manipulations will be exposed one by one, and the market’s gray areas will be squeezed out. More importantly, it will break the cautious attitude of institutional investors. Currently, due to unclear regulations, many institutional investors only dare to allocate to top assets like Bitcoin, limiting their penetration into the entire crypto market. If a proper regulatory framework is established, and related risks are significantly reduced, those massive capital reserves that are currently on the sidelines may flood into the entire market, especially mid- and long-tail tokens.

At that point, the crypto market will truly enter an era of liquidity. This is the deeper significance behind the date of January 15th.