- Senate amendments could expand legal risks for DeFi developers nationwide.
- Crypto groups warn new AML rules may tighten pressure on self-custody tools.
- Advocacy groups plan senator scorecards ahead of key CLARITY Act votes.
Crypto advocacy organizations intensified pressure on U.S. senators ahead of the Senate Banking Committee’s markup of the CLARITY Act. According to Eleanor Terrett, a journalist and co-host of the Crypto In America podcast, the push followed the submission of more than 100 amendments to the legislation late Tuesday night. Several industry groups warned that multiple proposals could reshape decentralized finance rules and weaken protections for developers.
The DeFi Education Fund identified a list of amendments that it believes threaten decentralized finance infrastructure. According to the group, the proposals could expand liability for software developers, tighten anti-money laundering obligations, and reduce legal protections tied to self-custody technology.
Besides targeting developers, the amendments also focus on DeFi front-end operators, tokenization frameworks, and broader compliance standards for digital asset companies. Consequently, advocacy groups have started lobbying senators before Thursday’s committee vote.
Democratic Senators Push Tougher Oversight
Several amendments originated from Democratic senators, including Catherine Cortez Masto, Andy Kim, Chris Van Hollen, Elizabeth Warren, and Jack Reed.
DEF argued that several amendments would rewrite or remove the Blockchain Regulatory Certainty Act, commonly called BRCA. The organization said those revisions could expose non-custodial software developers to additional legal risk.
Moreover, Senator Kim’s proposals would reportedly broaden the definition of financial institutions under federal banking law. DEF warned that the change could pull more digital asset businesses under Bank Secrecy Act obligations.
Senator Van Hollen’s amendments raised additional concern among crypto advocates. The measures could extend criminal liability to developers connected to DeFi protocols used in financial crimes. Industry groups argued that the language may punish developers who never controlled user funds.
Meanwhile, Senator Warren introduced several amendments tied to anti-money laundering and counter-terrorism financing compliance. Her proposals would establish new obligations for DeFi businesses and certain front-end services. Additionally, one amendment seeks to close perceived tokenization loopholes.
Crypto Advocacy Groups Prepare Scorecards
The advocacy group Stand With Crypto announced plans to score senators based on their amendment votes during the markup process. The organization stated that votes affecting self-custody rights, DeFi protections, or BRCA provisions would directly influence lawmakers’ ratings.
Significantly, the group said more than 2.9 million advocates continue supporting market structure legislation in Washington. It also noted that supporters contacted lawmakers nearly 1.5 million times over recent years.
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