Revised CLARITY Act targets ‘non-decentralized’ DeFi operators
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Written by
Simonas Brazionis - Updated 2026-09-12 18:04:24
A revised version of the CLARITY Act proposes that U.S. regulators determine whether individuals or groups overseeing “non-decentralized DeFi operators” must adhere to existing securities, commodities, and anti-money laundering (AML) regulations.
The updated bill, published on Senator Cynthia Lummis' official website, defines a non-decentralized protocol as one where a single entity or a coordinated group can significantly alter its functions, operations, or rules. This definition also extends to protocols where controllers can restrict user access or where transactions are not exclusively governed by transparent, pre-defined code.
Regulatory Framework and Exemptions
Under the proposed legislation, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) would be tasked with developing activity-based regulations covering registration, conduct, disclosure, recordkeeping, and supervision. Concurrently, the Treasury Department would establish how current Bank Secrecy Act obligations apply to these affected controllers.
The bill explicitly states that software and distributed ledger systems would not be required to register independently. It also clarifies that participation in an incident-response or security council would not, by itself, constitute control over a protocol.
Industry Reaction and Legislative Outlook
The revised text was released in advance of a procedural Senate vote scheduled for September 15. The measure requires 60 votes to proceed, necessitating bipartisan support amidst ongoing disagreements concerning ethics, AML protections, and stablecoin rewards.
The cryptocurrency industry has expressed support for the bill. Ji Hun Kim, CEO of the Crypto Council for Innovation, characterized the upcoming vote as a significant moment for digital assets, innovation, and American leadership, emphasizing the need for a framework that balances consumer protections with business conduct standards.
Coinbase CEO Brian Armstrong indicated that the CLARITY Act was ready for approval, stating that prior concerns raised by Coinbase had been addressed, and negotiations on ethics restrictions were nearing resolution. However, the ethics section in the new text remained largely unchanged from its previous iteration, despite being a primary point of contention.
Senator Ruben Gallego had previously cautioned against a vote before resolving disputes related to ethics and stablecoin yield. Armstrong suggested that if the legislation fails to advance, the SEC and CFTC could still pursue rulemaking and innovation exemptions using their existing regulatory authority.
