- Cynthia Lummis says the Clarity Act will give crypto firms clearer rules in the U.S.
- DeFi groups warn that new bill language could let the U.S. SEC expand oversight.
- The CLARITY Act still faces further debates and approvals before becoming law.
U.S. Senator Cynthia Lummis has defended the proposed Digital Asset Market Clarity Act, saying clear crypto rules are important to protect innovation and consumers in the United States.
In a post on X, Lummis said that a lack of regulation does not protect people from harm; it just means no resources. She added that she has spent years working on the Clarity Act to help digital assets grow in the U.S. under clear rules.
Senate Committee Moves Bill Forward
Notably, the Senate Banking Committee approved the CLARITY Act last week in a close 15-9 bipartisan vote after negotiations between Republicans and Democrats.
The bill is one of the most important proposals on crypto market structure in the U.S. It aims to establish clearer rules for digital assets, crypto trading platforms, and decentralized finance (DeFi) projects.
Democratic Senators Angela Alsobrooks and Ruben Gallego supported the bill after last-minute compromises were added.
Gallego said lawmakers discussed difficult issues such as regulatory authority, consumer protection, stablecoins, crypto ATMs, and protections during insolvency cases. However, he noted that supporting the bill in committee does not guarantee support during the full Senate vote.
DeFi Sector Concerned About New Language
Despite progress on the bill, some parts of the DeFi industry are worried about new wording that could affect how regulators treat DeFi projects.
One reported change removed earlier protections for blockchain developers who do not control protocols. Under the updated language, developers or contributors could be treated as “securities intermediaries” if regulators believe they have coordinated control over a project.
Critics say this could give agencies like the U.S. SEC power to regulate projects that claim to be decentralized.
The revised text also includes wording about parties acting through an “agreement, arrangement, or understanding”. This has raised concerns that governance token holders, developers, or contributors working together could face regulatory scrutiny even if they do not control customer funds.
Key Protection for Developers Still Included
Although concerns remain, the bill still provides important protection for developers. The Blockchain Regulatory Certainty Act stayed in the legislation. The measure protects software developers who do not control customer funds from being treated as money transmitters.
Lummis said keeping this protection in the bill was one of her top priorities. She also stated that she will continue working with industry groups and lawmakers to move the legislation forward while helping the U.S. stay competitive in digital asset innovation.
Other Changes Added to the Bill
Several additional amendments were added during the Senate Banking Committee hearing.
Senator Mike Rounds proposed a regulatory sandbox that would allow financial companies to test artificial intelligence products. This added AI-related provisions to the crypto bill.
Senator Dave McCormick also introduced an amendment to give institutions more flexibility in calculating portfolio margin requirements, a move welcomed by some institutional crypto firms.
Bill Still Faces More Challenges
Even though the Senate Banking Committee approved the CLARITY Act, the bill still has several steps to complete before it can become law.
The proposal must be combined with a similar bill already approved by the Senate Agriculture Committee before moving to a full Senate vote.
Lawmakers are also expected to debate ethical concerns related to government officials’ involvement in crypto, including concerns raised by Democrats about Donald Trump and his ties to the digital asset industry.
As discussions continue, the bill’s changing language around DeFi regulation remains one of the most debated parts of the legislation.
Related: Senator McCormick: CLARITY Act May Reach President’s Desk This Summer
Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.
