A revised version of the CLARITY Act would give U.S. regulators greater authority to determine whether certain DeFi platforms should comply with securities, commodities and anti-money laundering rules.
The updated proposal focuses on so-called non-decentralized finance trading protocols, especially platforms where individuals or coordinated groups retain meaningful control.
CLARITY Act Expands Focus on Controlled DeFi Protocols
The revised legislation defines a non-decentralized protocol as one where a person or group can significantly alter how the platform operates.
This could include changing its rules, functionality or transaction process.
The definition also covers protocols where controllers can restrict users or where transactions are not governed entirely by transparent and pre-established code.
SEC and CFTC Could Introduce New DeFi Requirements
Under the proposal, the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) would develop new activity-based rules.
These regulations could cover areas such as registration, disclosures, business conduct, supervision and recordkeeping.
The U.S. Treasury would also determine how existing Bank Secrecy Act obligations apply to individuals or organizations that control affected DeFi platforms.
Software Would Not Be Required to Register
The bill makes an important distinction between software and the people who control it.
Distributed ledger systems and software would not need to register as regulated entities simply because they operate a DeFi protocol.
The legislation also states that participation in a security council or incident-response group would not automatically mean that an individual controls a protocol.
This provision aims to separate technical involvement from actual operational authority.
Senate Vote Puts CLARITY Act in Focus
The revised text was released ahead of a key procedural vote in the U.S. Senate scheduled for September 15.
The bill needs 60 votes to advance, meaning Republican lawmakers will require support from Democrats.
However, several issues remain unresolved, including ethics rules, anti-money laundering protections and stablecoin rewards.
These disagreements could determine whether the legislation gains enough support to move forward.
Crypto Industry Supports the CLARITY Act
Parts of the crypto industry have expressed support for the legislation.
Ji Hun Kim, CEO of the Crypto Council for Innovation, described the upcoming vote as an important moment for digital assets and U.S. leadership in the sector.
He argued that the United States needs a regulatory framework that combines consumer protection with clear business standards.
Industry supporters believe greater regulatory certainty could encourage innovation while giving companies clearer rules to follow.
Coinbase Says Bill Is Ready for a Vote
Coinbase CEO Brian Armstrong also expressed support for the revised legislation.
He said the CLARITY Act was ready to move forward and suggested that several issues previously raised by Coinbase had been addressed.
However, Armstrong acknowledged that negotiations over ethics restrictions were still ongoing.
He did not provide specific details about which provisions had changed.
Ethics Rules Remain a Major Obstacle
Despite continued negotiations, the ethics section of the revised bill remained largely unchanged.
This issue has been one of the main areas of disagreement among lawmakers.
Democratic Senator Ruben Gallego previously warned against moving too quickly before disputes over ethics and stablecoin yields were resolved.
His comments highlighted the risk that rushing the legislation could prevent lawmakers from reaching broader bipartisan support.
Stablecoin Rules Also Remain Controversial
Stablecoin rewards and yield provisions remain another point of debate.
Some lawmakers want stronger protections around how stablecoin-related products are offered, while others are concerned that excessive restrictions could limit innovation.
These disagreements have become increasingly important as stablecoins play a larger role in the crypto market.
The issue could therefore influence whether enough senators support the bill.
Regulators Could Act Without Congress
If the CLARITY Act fails to advance, U.S. regulators could still introduce new crypto rules using their existing authority.
Armstrong said the SEC and CFTC could pursue rulemaking or create innovation exemptions without waiting for Congress.
That means regulatory changes for DeFi and digital assets could continue even if the legislation stalls.
However, many industry participants prefer a formal law because it could provide greater long-term certainty.
CLARITY Act Could Reshape U.S. DeFi Regulation
The revised CLARITY Act represents another major step toward creating a clearer regulatory framework for digital assets in the United States.
Its focus on DeFi platforms with centralized control could have significant consequences for developers, operators and crypto companies.
For now, attention will remain on the upcoming Senate vote and whether lawmakers can resolve disagreements over ethics, stablecoins and regulatory oversight.
