Updated CLARITY Act Targets Centralized DeFi Platforms Ahead of Senate Vote

A revised version of the CLARITY Act would require U.S. regulators to determine whether individuals or groups controlling certain decentralized finance platforms must follow securities, commodities, and anti money laundering rules. The updated bill specifically targets what it calls “non decentralized finance trading protocols” platforms where a person or coordinated group can materially alter how the system operates, restrict user access, or influence transactions outside of transparent, pre-set code.

Under the proposal, the Securities and Exchange Commission and Commodity Futures Trading Commission would create activity based rules covering registration, conduct, disclosure, and oversight. The Treasury Department would separately clarify how existing financial crime laws apply to these platform controllers. Notably, the bill states that software itself and blockchain systems would not need to register, and simply participating in a security response team would not automatically count as controlling a protocol.

Ethics Concerns Remain Unresolved Before Key Vote

The revised text arrives ahead of a Senate procedural vote scheduled for September 15, which requires 60 votes to move forward. Despite industry support, including comments from Crypto Council for Innovation CEO Ji Hun Kim and Coinbase CEO Brian Armstrong calling the bill nearly ready, the ethics section remains largely unchanged from earlier drafts. This section has been a major sticking point in negotiations.

Democratic Senator Ruben Gallego previously cautioned against rushing the vote before ethics and stablecoin related disputes are resolved. Armstrong noted that if the bill fails to advance, regulators could still pursue oversight through existing rulemaking authority.