CLARITY Act Stalls in Senate Despite DeFi Sanctions Provisions

The U.S. Digital Asset Market CLARITY Act, which aims to establish a federal regulatory framework for digital assets, has hit a roadblock in the Senate. Despite incorporating provisions requested by Senate Democrats concerning decentralized finance sanctions, every Senate Democrat voted against moving the legislation forward.

The final version of the bill, released on September 14, included changes made during negotiations with Democratic lawmakers. Sen. Cynthia Lummis' office said the final text reflected over 120 substantive changes requested by Democrats, including language addressing non-decentralized finance protocols and their registration requirements.

The legislation also included provisions concerning illicit finance, consumer protections, conflicts of interest, and the regulatory treatment of digital asset activities. However, Democratic senators involved in the process said the current legislation did not fully address their concerns.