Senate Republicans released a revised 630-page version of the CLARITY Act on Thursday, five days before a procedural vote that will decide whether the flagship crypto market-structure bill advances at all.
The new text, unveiled by Senator Cynthia Lummis of Wyoming and other Republicans, directs US regulators to determine whether people or groups controlling “non-decentralized finance trading protocols” must comply with securities, commodities and anti-money laundering requirements. In practice, that means protocols run by an identifiable company or team, what Lummis called “decentralized-in-name-only” DeFi, would need to register with the Commodity Futures Trading Commission.
Under the proposal, the SEC and CFTC would develop activity-based rules covering registration, conduct, disclosure, recordkeeping and supervision. The Treasury would establish how existing Bank Secrecy Act obligations apply to the controllers of such protocols. The bill specifies that software and distributed ledger systems themselves would not be required to register, and that merely participating in an incident-response or security council would not, by itself, establish control over a protocol.
The drafting choice matters for an industry that has spent four years arguing in court over whether a token is a security. The CLARITY Act, if passed, would effectively legalize most cryptocurrency trading activity in the United States, draw jurisdictional lines between the CFTC and SEC, and largely clear the way for crypto startups to raise funds through token sales once again. That is why both sides of the aisle, and every major exchange and trade association in Washington, are watching Tuesday’s vote so closely.
A bill with a deadline
The revised text arrived ahead of a procedural Senate vote, known as a cloture vote, scheduled for September 15. That vote needs at least 60 senators to advance the bill, and its result is widely viewed in Washington as do-or-die for the legislation. The Senate returns from recess with limited time on its calendar, and if the motion to proceed fails, the bill’s path this Congress becomes murky at best.
Lummis said the new version contains more than 114 changes requested by Democrats, including a narrowing of the DeFi provisions to spot and cash transactions in response to Native American concerns about prediction markets. “This updated Clarity Act text reflects bipartisan hard work over August,” she wrote on X, adding, “Let’s get this done!” She also argued that legislation, unlike rulemaking, gives the industry a lasting solution that shields it from the whiplash of changes in the White House.
The optimism may be premature. Blockhead reported that the rewrite dropped with no declared Democratic support, and the bill still faces what Yahoo Finance described as a “troubling” warning from Treasury Secretary Scott Bessent, who has pressed the Senate to pass the measure but flagged unresolved issues days before the vote. Bessent’s endorsement carries weight with moderates, but his caveats suggest the administration is not treating passage as a formality.
Ethics section unchanged
One notable holdover: the bill’s ethics section remained largely unchanged from the July draft, despite being one of the main points of contention. The provisions prohibit public officials, employees and their spouses from issuing or sponsoring digital assets while in office. Democratic Senator Ruben Gallego placed a hold on earlier versions over ethics and other concerns in August, and it remains unclear whether his objections are resolved in the new text.
The DeFi language aside, industry reaction was broadly positive. Ji Hun Kim, CEO of the Crypto Council for Innovation, called next Tuesday’s vote a pivotal moment for digital assets and American leadership, telling Cointelegraph the US needs a framework combining consumer protections with business conduct standards. Coinbase CEO Brian Armstrong urged passage and warned that if the legislation stalls, the SEC and CFTC would simply pursue their own rulemaking using existing authority, a path the industry has spent years fighting in court.
The September 15 vote follows a run of momentum that seemed unlikely a month ago. Sheriffs’ groups dropped their opposition to the bill earlier this week, moving to a neutral position after raising alarms about prediction markets, and Bessent publicly urged passage as the Senate returned from recess. More than 200 crypto organizations, including Coinbase and Ripple, had earlier signed a letter urging the Senate to schedule exactly this kind of vote.
What the rewrite does not settle is the deeper argument over decentralization itself. The bill’s test for “non-decentralized” status turns on control, discretion, or the ability to alter or censor protocol operations, definitions that regulators will flesh out in rulemaking long after the vote. For DeFi projects, the practical question is whether their governance is distributed enough to stay outside the registration net, and that will be decided case by case, likely in enforcement actions before guidance arrives.
There is also a jurisdictional carve-out to watch. The revised text keeps the DeFi provisions limited to spot and cash transactions, leaving derivatives on such protocols in a gray zone that the CFTC has shown interest in policing. Industry lawyers expect that gap to generate the next round of lobbying if the bill clears Tuesday’s hurdle.
| Key element | What the revised text does |
|---|---|
| Non-decentralized protocols | Must register with the CFTC if controlled by identifiable persons or groups |
| SEC and CFTC | Write activity-based rules on registration, conduct, disclosure, recordkeeping |
| Treasury | Applies Bank Secrecy Act obligations to protocol controllers |
| Software and ledgers | Not required to register in their own capacity |
| Scope | DeFi provisions limited to spot and cash transactions |
| Ethics provisions | Unchanged from July draft, still contested |
For now, the industry’s message to the Senate is the one Lummis echoed: take the deal on the table. Whether 60 senators agree will be clear by Tuesday evening.