Revised CLARITY Act Would Set Rules for Controlled DeFi

A revised version of the CLARITY Act would tell US regulators to determine when operators of nondecentralized DeFi trading protocols must follow securities, commodities, and antimoney laundering rules. The proposal defines those protocols as systems whose rules or operations can be materially changed by a person or coordinated group, or where controllers can restrict users or override transparent code. Under the draft, the SEC and CFTC would write activitybased rules covering registration, conduct, disclosure, recordkeeping, and supervision. The Treasury Department would also decide how Bank Secrecy Act requirements apply to covered controllers. The update comes before a procedural Senate vote scheduled for Sept. 15. The bill still needs 60 votes to move forward, and lawmakers remain divided over ethics provisions, antimoney laundering safeguards, and stablecoin rewards. Industry leaders, including Crypto Council for Innovation CEO Ji Hun Kim and Coinbase CEO Brian Armstrong, say the measure could provide a workable regulatory framework if it advances.