Clarity Act Negotiations Hit a Roadblock as Industry Loses Crucial Protections

The Digital Chamber's Cody Carbone expressed concerns about the recent developments in the Clarity Act negotiations. The bill, aimed at regulating cryptocurrencies and digital assets, has undergone significant changes since its introduction.

In an interview on Unchained, Carbone stated that the industry had lost a crucial protection with the removal of the Blockchain Regulatory Certainty Act from the final text. This provision shielded developers who couldn't control users' transactions from being treated as money transmitting businesses.

The sponsors of the bill, led by Senators Cynthia Lummis, John Boozman, and Tim Scott, released the final text on September 14. It included 126 substantive changes made at Democrats' request, including ethics restrictions that President Biden accepted. Despite these concessions, every Democrat voted against cloture.

Carbone emphasized the importance of protecting developers from criminal liability, stating that they would keep civil protection but could still be held criminally liable if their technology was used for illicit activities.