Key Highlights
- Senator Lummis directly addressed reports of a “big new hurdle,” confirming she is actively working to balance non-custodial developer protections with law enforcement accountability.
- Senator Thom Tillis (R-NC) relayed concerns from police and prosecutors regarding safe harbors that protect decentralized software builders from “money transmitter” classifications.
- Despite multiple delays, Lummis publicly committed at the Bitcoin 2026 conference to marking up the CLARITY Act in May.
U.S. Senator Cynthia Lummis moved quickly Tuesday to downplay fresh objections from a fellow Republican lawmaker, insisting that law enforcement concerns will not derail the long-awaited Digital Asset Market Clarity Act.
In a direct response posted on X, Lummis addressed a report quoting Sen. Thom Tillis (R-NC) as saying lawmakers “need to address” worries from law enforcement groups over a key provision in the crypto market structure bill. Tillis had described the issue as a “big new hurdle.”
“This isn’t a big new hurdle, and is something I’m working on now,” Lummis wrote. “I am committed to keeping protections for non-money transmitting developers safe without tying law enforcement’s hands to hold bad actors accountable.”
The exchange highlights the final stretch of negotiations on the CLARITY Act (H.R. 3633), the House-passed bill that would grant the CFTC primary jurisdiction over digital commodities while the SEC retains authority over digital securities, create clear DeFi safe harbors, and resolve years of regulatory overlap that has chilled U.S. innovation.
Lummis Signals Imminent Progress After Months of Delays
Just 24 hours earlier, Lummis had delivered her strongest timeline yet at the Bitcoin 2026 conference in Las Vegas. “We are going to markup the Clarity Act in May. We are going to get it to the finish line,” she told attendees, noting that stablecoin language and core market-structure provisions are now “almost 99% sorted out.”
Her latest statement appears aimed at reassuring the crypto industry that the latest friction — centered on how the bill balances developer protections with anti-money laundering and enforcement tools — is already being addressed in closed-door talks.
The CLARITY Act has faced repeated delays since the House passed it by a wide 294–134 bipartisan margin in July 2025. Senate Banking Committee negotiations dragged through stablecoin yield disputes, banking industry pushback, and scheduling conflicts. A January markup was pulled at the last minute after Coinbase withdrew support over proposed restrictions on stablecoin rewards. In April, Tillis asked Chairman Tim Scott to delay the markup further to allow more time for banking stakeholder negotiations.
Multiple reports from The Crypto Times have tracked the bill’s stop-start journey, from Coinbase’s temporary opposition and reversal to Lummis’ repeated vows that this Congress represents the industry’s “last chance” before 2030.
Why the Law Enforcement Provision Matters
At the heart of Tillis’ reported concern is language designed to protect open-source developers and non-custodial protocols from being deemed “money transmitters” simply for building decentralized software. Industry groups have long warned that overly broad enforcement interpretations — as seen in recent cases involving immutable smart contracts — could drive builders offshore and stifle DeFi innovation. The law enforcement groups raising objections represent police and prosecutors who argue that such protections could create gaps in accountability, particularly for decentralized platforms used for illicit finance.
Coinbase Chief Legal Officer Paul Grewal pushed back aggressively on the law enforcement narrative, noting that the CLARITY Act actually expands Bank Secrecy Act coverage to digital asset brokers and forces offshore activity back into U.S. jurisdiction.
Lummis’ wording Tuesday mirrors language she has used throughout the process: safeguard legitimate developers while ensuring regulators and law enforcement retain the ability to target illicit activity. She has previously framed the CLARITY Act as “the best thing that could happen to the DeFi community”, specifically citing safe harbors for developers, validators, and node operators.
The Tillis Factor: More Than One Hurdle
The law enforcement objection is not the only condition Tillis has placed on the bill. As a pivotal vote on the Senate Banking Committee, he is simultaneously juggling multiple high-stakes negotiations to get the legislation across the finish line.
Beyond the push to alter safe harbors for non-custodial developers—an issue currently under active negotiation with Lummis—Tillis is demanding the inclusion of a strict White House ethics provision. This provision would restrict administration officials from promoting or endorsing digital assets, a move aimed directly at the Trump family’s $1 billion-plus crypto ventures. Tillis, along with Democratic Senator Ruben Gallego, has stated he will vote against the bill without this ethics language.
Furthermore, Tillis is heavily involved in finalizing the text regarding stablecoin yields. He has been working to restrict passive yield while permitting activity-based rewards, an effort currently being brokered through the Tillis-Alsobrooks compromise.
What Comes Next
Senate Banking Committee Chairman Tim Scott (R-SC) has not yet set a firm markup date, but Lummis’ back-to-back comments suggest momentum is building for action in the coming weeks. With the Senate heading into a weeklong recess, the earliest the Banking Committee could schedule a markup is the week of May 11, assuming the remaining disputes are resolved in time.
If the committee advances the bill, it would still need a full Senate floor vote requiring 60 votes, reconciliation with the Senate Agriculture Committee version (which passed committee on January 29), reconciliation with the House-passed version, and a presidential signature.
For the broader market, passage would mark the most significant U.S. crypto legislation in history — delivering the regulatory clarity that exchanges, DeFi projects, and institutional players have sought since the 2022 FTX collapse.
The clock is ticking. With Lummis now publicly framing the latest objection as manageable, the path to a May markup appears clearer than it has in months.
Also Read: Coinbase, Ripple, and Tillis Are All Ready, But CLARITY Act Doesn’t Have a Date
