On September 10, Republican senators in the United States unveiled a revised version of the CLARITY Act, which includes regulations for trading DeFi protocols that do not meet decentralization standards. Senator Cynthia Lummis announced the updates.

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 630-page document is set for procedural voting on September 15, which will determine the bill's future progress, although it does not guarantee its final passage.

Lummis stated that the authors incorporated over 114 provisions at the request of Democrats, describing the outcome as a bipartisan compromise.

Proposed Requirements for DeFi

The new version clarifies which trading protocols cannot be considered decentralized and outlines the requirements for their operators.

The bill text identifies three criteria for a lack of decentralization:

  • A single individual or a coordinated group can significantly alter the service's operations or consensus rules;
  • They can restrict user access or block their actions;
  • Operations are not conducted solely according to pre-established transparent rules embedded in the code.

Meeting any one of these criteria is sufficient for classification. The SEC and CFTC will need to create separate regulations for individuals controlling such services, each within their jurisdiction.

The SEC will clarify requirements for activities governed by securities law, while the CFTC will focus on commodities exchange law. In both cases, the regulations will cover registration, disclosure, record-keeping, and oversight.

The Treasury Department will specify how to meet applicable anti-money laundering and counter-terrorism financing requirements.

However, participation in decentralized governance does not automatically imply that an individual co-controls the protocol with others.

A separate amendment restricts the DeFi provisions to spot transactions involving digital goods, specifically the buying and selling of crypto assets categorized as such.

According to Lummis, this clarification addresses concerns from Native American authorities regarding the bill's impact on prediction markets.

Outstanding Disagreements

Despite the new concessions, Republicans have yet to gain support from the opposing party, as noted by Politico.

One ongoing issue is the debate over restrictions on officials. In July, Democrats called for a ban on the president, Congress members, and their families profiting from crypto businesses.

Later, Senators Thom Tillis and Ruben Gallego proposed requiring the president to divest from such projects and granting state prosecutors the authority to enforce ethical standards.

However, the revised text did not significantly alter this section. Legal action remains solely under the purview of the U.S. Attorney General, and the prohibition on issuing and sponsoring digital assets for compensation is limited until January 20, 2029.

Additionally, a provision remains that excludes liability for earlier violations of this section after that date. Democrats criticized these enforcement limitations prior to the August recess.

In September, Coinbase CEO Brian Armstrong stated that the crypto market would achieve regulatory clarity regardless of the CLARITY Act's outcome. He believes that if the bill is not passed, the SEC and CFTC will introduce their own regulatory initiatives.