Lummis Pledges May Markup for CLARITY Act Amid DeFi Debates

Senator Cynthia Lummis pledged to advance the CLARITY Act through a Senate Banking Committee markup in May, amid ongoing debates over protections for decentralized finance developers and demands for ethics provisions from fellow Republican Senator Thom Tillis.

The Cryptoassets Legal Clarity and Regulatory Improvement Act seeks to establish clear rules for digital assets under U.S. law, assigning oversight to the Securities and Exchange Commission and Commodity Futures Trading Commission while shielding noncustodial software developers from liability when users engage in illegal activities on their platforms. The provision, similar to one in the Blockchain Regulatory Certainty Act, has drawn sharp criticism from law enforcement groups, including police and prosecutors, who argue it complicates prosecutions in illicit finance cases.

Tillis, a key committee member, stated that lawmakers must address these enforcement concerns and include ethics language on federal crypto activities before he supports the bill. "There has to be ethics language in the bill before it leaves the Senate, or I'll go from one of the people working on negotiating it to voting against it," Tillis told...