Lummis: Updated Clarity Act Incorporates More Than 100 Democrat-Requested Changes

Sen. Cynthia Lummis said the latest text of the Clarity Act incorporates more than 100 edits sought by Democrats. Senate Republicans released a 630-page version, 14 pages longer than the July 22 draft. The September draft changes 14 of the bill's 103 sections, with 104 discrete edits across those provisions. A key revision is the DeFi safe harbor in Section 20209, which expanded from 285 words to roughly 2,200 words. The provision would create a full carve-out for validators under the Commodity Exchange Act and extend the same protection to node operators. It also covers individuals who publish wallet software. Other participants would receive narrower relief. Frontends, governance systems, liquidity pools and wallet-software upkeep would be protected only from spot-market rules. The measure directs the CFTC to write compliance rules for controllers of protocols that are decentralized in name only. The mandate would not automatically require registration, and the code itself would not be required to register. Treasury would be tasked with drafting corresponding anti-money-laundering rules for entities the CFTC brings under the framework. The bill would preempt state securities, commodities and digital-asset laws for covered activities, including conduct occurring before enactment. State authority to police fraud, manipulation and money laundering would remain in place. Division C, the ethics title, is unchanged. Section 10404 continues to bar yield on payment stablecoins. Section 10604 still includes developer protections known as the Blockchain Regulatory Certainty Act. The American Bankers Association and more than 60 other banking groups urged Senate leaders to tighten the bill's rewards provisions, warning the rules could accelerate deposit flight from community banks. Republican Sens. Josh Hawley and Jerry Moran have also raised concerns. Democrats have tied support to stronger ethics provisions addressing President Donald Trump's crypto holdings. The bill would give credit unions clearer footing by incorporating definitions from the GENIUS Act, while not expanding their authority into brokerage or dealing. Under the revised text, CFTC spot oversight would apply to every payment stablecoin. The July version applied only to payment stablecoins issued by licensed issuers. The bill would also cover transactions conducted on or through an entity registered with the Commission. States would retain fraud-enforcement powers against registrants under Section 20207. Senators are scheduled to vote Tuesday afternoon on whether to invoke cloture on the motion to proceed. The vote requires 60 votes.