A new Senate Republican draft of the CLARITY Act would require some centrally controlled crypto trading protocols to register with the Commodity Futures Trading Commission, introducing a new regulatory requirement ahead of the bill’s first procedural vote on Sept. 15.
The 630-page revision was released Thursday by Sen. Cynthia Lummis and fellow Republicans. The Senate has spent the past year trying to advance legislation that would establish federal regulation of the cryptocurrency industry for the first time.
Lummis said Republicans accepted more than 114 provisions sought by Democratic colleagues during negotiations. She argued the legislation would give the crypto sector rules that could remain in place across presidential administrations, unlike regulations that can shift with control of the White House.
DeFi Changes Draw A Line Around Protocol Control
Under the revised approach, a protocol could fall into the bill’s “non-decentralized finance” category when an individual or coordinated group has authority, exercised either directly or indirectly through an agreement, relationship, or other arrangement, to oversee its functionality or make material changes to its operations or rules governing consensus.
Entities covered by that classification would be subject to CFTC registration. The legislation also directs the CFTC, together with Treasury, to issue regulations to implement the provision. A crypto industry source said Democrats sought to include the new section.
Another revision limits the relevant DeFi provisions to “spot and cash” transactions involving digital commodities. According to Lummis, that restriction responds to tribal governments’ concerns about the legislation’s potential impact on prediction markets.
Meanwhile, Lummis said the draft includes changes that clarify rules for credit unions engaging in cryptocurrency activities.
The revisions come as lawmakers face a narrowing window to advance the broader legislation after returning to Washington. The bill’s route to President Donald Trump’s desk has already been complicated by disagreements between banks and the crypto industry over stablecoin rewards, concerns surrounding illicit finance and an unresolved ethics dispute.
Trump-Linked Crypto Wealth Remains Part of Ethics Fight
That dispute centers on how the legislation should address Trump’s growing cryptocurrency wealth, including hundreds of millions of dollars tied to World Liberty Financial and the TRUMP memecoin.
In July, Trump accepted an ethics measure that would prevent government officials, public employees and their spouses from sponsoring or issuing digital assets. The Justice Department would oversee enforcement of the restriction, not state attorneys general. It is scheduled to lapse at the beginning of January 2029.
Democrats said those protections were inadequate and later put forward different ethics language alongside Republican Sen. Thom Tillis.
The latest draft leaves the ethics section largely unchanged. Politico reported that the revised measure currently lacks Democratic backing, which is crucial for the legislation to pass.
Lummis has repeatedly used X to press for passage as she approaches the end of her Senate career. She is not seeking another term and is due to leave Congress in January 2027.
In a Wednesday post, Lummis said the passage would allow the United States to shape its own crypto rules rather than watch jurisdictions such as Singapore or the United Arab Emirates (UAE) take the lead on regulation. She also invoked the country’s history of leadership in arguing that the U.S. should continue to lead.