Senate Republicans have released a revised version of the Clarity Act, a 630-page bill intended to create a federal framework for digital-asset markets and define how U.S. regulators would divide oversight responsibilities.
The updated draft, unveiled by Senator Cynthia Lummis on Thursday ahead of a September 15 procedural vote, makes notable changes to its treatment of crypto trading protocols and decentralized finance. It would require trading protocols that are controlled by people or groups, rather than operating in a genuinely decentralized way, to register with the Commodity Futures Trading Commission.
Focus on protocols that are not truly decentralized
The new draft takes aim at what lawmakers describe as crypto trading protocols that are decentralized in name only. Under the revised language, protocols that are not meaningfully decentralized because they remain under the control of individuals or organized groups would face registration requirements.
The bill would put those protocols under the CFTC’s registration framework, while also directing the Treasury Department to work on related rules. The change is one of the clearest revisions in the updated text and reflects an effort to distinguish between systems that operate autonomously and those that still have identifiable controllers.
DeFi language narrowed after prediction market concerns
Republicans also adjusted the bill’s decentralized finance provisions. In the revised version, those sections are limited to spot and cash transactions, narrowing the earlier scope of the language.
According to the report, that change was made in response to concerns tied to prediction markets. The revision suggests lawmakers are trying to refine how the legislation applies to DeFi activity without extending its reach beyond the transactions specifically identified in the draft.
Ethics rules remain largely the same
The revised text reportedly leaves the bill’s ethics provisions mostly unchanged from the version circulated in July. Those rules would continue to bar public officials, government employees, and their spouses from issuing or sponsoring digital assets.
That area remains politically sensitive. Democrats have pushed for broader restrictions connected to President Trump’s crypto interests, but the new Republican draft does not appear to adopt those wider limits.
Lobbying push continues as partisan divide remains
Supporters of the Clarity Act have mounted a heavy lobbying campaign around the legislation. Backers argue that the bill would bring more certainty to the digital-asset sector by clarifying how authority should be split between the CFTC and the Securities and Exchange Commission.
They also contend that a clearer federal structure could help crypto startups raise funds again. Even so, the measure appears to face a difficult political path: no Democrats are reportedly backing the revised bill ahead of the upcoming procedural vote.
Next confirmed step is the September 15 vote
For now, the immediate milestone is the September 15 procedural vote referenced by Senator Lummis when she released the updated draft. That vote will test whether Republicans can advance the Clarity Act despite the absence of reported Democratic support.
Until then, the revised bill serves as the latest statement of Senate Republican priorities on digital-asset regulation: tighter treatment of controlled crypto protocols, narrower DeFi language, and largely unchanged ethics restrictions as the broader debate over federal crypto oversight continues.
Source: decrypt.co