Republicans Revise CLARITY Act Ahead of Senate Vote

On September 10, U.S. Republican senators presented an updated version of the CLARITY Act aimed at regulating decentralized finance (DeFi) protocols lacking sufficient decentralization. Senator Cynthia Lummis announced the revisions, which are set for a procedural vote on September 15.

This updated Clarity Act text reflects bipartisan hard work over August—specifying when decentralized-in-name-only DeFi protocols must register with the CFTC and limiting the DeFi provisions to spot and cash transactions, in response to Native American concerns about prediction…

— Senator Cynthia Lummis (@SenLummis) September 10, 2026

The revised document spans 630 pages and incorporates over 114 provisions requested by Democrats, marking a significant bipartisan effort. Key updates specify conditions under which DeFi protocols will need to register with the Commodity Futures Trading Commission (CFTC) and delineate the types of transactions regulated under the bill.

Criteria for Decentralization

New provisions detail what constitutes a lack of decentralization, outlining three main criteria: a coordinated group can alter operations, restrict user access, or operate outside established transparent rules. If a protocol meets any of these criteria, it will be regulated accordingly.

Both the SEC and CFTC are tasked with formulating rules for entities that control such services, focusing on registration, disclosure, and oversight protocols. Additionally, the Treasury Department will clarify compliance requirements for anti-money laundering efforts.

Ongoing Challenges and Reactions

Despite these updates, bipartisan support remains elusive. Politico reports that disagreements linger, particularly around potential restrictions on political officials engaging in cryptocurrency businesses. Earlier proposals suggested banning profit-taking from crypto for officials and their families, but the latest revisions do not fully address these concerns.

Coinbase CEO Brian Armstrong expressed optimism about achieving regulatory clarity in the crypto market, regardless of the CLARITY Act's progress, asserting that the SEC and CFTC would likely move forward with their initiatives if the bill falters.