The DeFi Education Fund (DEF) is rallying opposition to a series of proposed amendments to the CLARITY Act, arguing that several would significantly expand liability for developers and decentralized finance platforms. The amendments were submitted ahead of Thursday’s markup of the digital asset market structure bill by the U.S. Senate Banking Committee.
In a post on X on Wednesday, the DeFi Education Fund said it is tracking what it described as “anti-DeFi amendments” and urged supporters to contact senators before the committee vote.
More than 100 amendments filed
Senate Banking Committee members submitted more than 100 amendments to the CLARITY Act late Tuesday. Not all amendments will be considered during the markup, but those selected could alter key sections of the bill before it advances to the Senate floor.
The CLARITY Act seeks to establish a federal framework for regulating digital asset markets and to clarify the respective roles of the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission.
Developer protections under scrutiny
Several of the amendments target provisions intended to shield software developers who do not control user assets. The DeFi Education Fund said amendments from Senator Catherine Cortez Masto would rewrite or remove parts of the Blockchain Regulatory Certainty Act (BRCA), a proposal incorporated into the CLARITY Act that seeks to protect non-custodial developers from being treated as money transmitters.
Other proposals would remove protections in Sections 301 and 302 of the bill for “non-controlling” developers.
AML rules could expand to DeFi platforms
Additional amendments would broaden anti-money laundering obligations for digital asset firms and certain DeFi interfaces. The advocacy group said proposals from Senator Andy Kim would expand the definition of “financial institution” under the Bank Secrecy Act to include digital asset businesses.
Amendments from Senator Elizabeth Warren would establish AML and counter-terrorism financing requirements for some DeFi front ends and businesses, while another proposal would address what her office described as “tokenization loopholes.”
Criminal liability concerns
The DeFi Education Fund also flagged amendments from Senator Chris Van Hollen that it says could expose developers to criminal liability if software they publish is used to facilitate money laundering or sanctions violations.
One proposal from Senator Jack Reed would reportedly subject smart contracts to sanctions regardless of whether they operate autonomously or can be modified. Another Reed amendment would remove the BRCA entirely from the CLARITY Act, according to the group.
Industry pushes to preserve existing language
The DeFi Education Fund said the amendment text was not yet public and that some descriptions were based on language reviewed by its policy team. The organization argues that the current version of the CLARITY Act reflects months of negotiations intended to distinguish between software developers and intermediaries that exercise control over customer assets.
The Senate Banking Committee is expected to debate and vote on amendments during Thursday’s markup, a key step in determining whether the bill advances to the full Senate.
Also Read: Coinbase CEO: CLARITY Act Is ‘Closer Than Ever’ Ahead of Key Vote
