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Senator Cynthia Lummis Says Revised CLARITY Act Strengthens DeFi Protections

Senator Cynthia Lummis Says Revised CLARITY Act Strengthens DeFi Protections

According to Senator Cynthia Lummis, bipartisan revisions to the CLARITY Act seek to protect DeFi developers from money transmitter treatment, with the bill expected to move to the Senate Banking Committee in April.

Fact Check
The statement is directly supported by Senator Lummis's own public communications and multiple reputable crypto news outlets. The details regarding DeFi developer protections, the 'money transmitter' context, and the April committee markup timeline are all explicitly mentioned in the sources (Cointelegraph, Crypto.news).
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Summary

Senator Cynthia Lummis said the revised CLARITY Act includes protections for DeFi developers and was updated through bipartisan changes to address concerns that non-custodial developers could be treated as money transmitters and subjected to know-your-customer obligations. She said the revisions are intended to shield non-custodial actors from being regulated like financial institutions. The bill is expected to enter the Senate Banking Committee in April, marking the next stage in debate over how the legislation would apply to decentralized software developers.

Terms & Concepts
  • DeFi: Decentralized finance services that use blockchain-based smart contracts instead of traditional financial intermediaries.
  • Non-custodial: A model in which developers or platforms do not hold or control users’ assets, reducing direct custody-related compliance obligations.
  • KYC: Know-your-customer rules require financial firms to verify user identities as part of anti-money-laundering compliance.