CLARITY Act Update Closes Loophole, Shields Self-Custodied Crypto

The Digital Asset Market Clarity Act (CLARITY Act) has been updated to close the 'DINO' loophole, which allowed crypto platforms claiming decentralization but still holding operational control to avoid anti-money laundering rules and sanctions.

Senator Cynthia Lummis said the bill brings every corner of the digital asset market inside the Bank Secrecy Act and sanctions framework, making it impossible for platforms to hide from the law.

A lesser-known provision in the bill protects self-custodied crypto from being considered abandoned property if a wallet goes unused, providing federal legal protections for long-term holders.

This move could benefit companies like Coinbase and Circle, as it provides clarity on digital assets and stablecoins, allowing them to list more assets with regulatory certainty.