Senator Lummis Defends Digital Asset Market Clarity Act Amid Criticism

U.S. Senator Cynthia Lummis has refuted claims that the Digital Asset Market Clarity Act fails to safeguard decentralized finance (DeFi) innovators from legal challenges. According to Cointelegraph, she emphasized that recent amendments to the draft will provide unprecedented protection for DeFi and developers. Her remarks on Friday were a direct response to crypto lawyer Jake Chervinsky, who contended that Title 3 of the current draft undermines the Blockchain Regulatory Certainty Act (BRCA) by imposing know-your-customer (KYC) requirements on non-custodial software developers. Lummis urged the public not to believe the fear, uncertainty, and doubt (FUD), stating, "We have worked on a bipartisan basis for the last few weeks to make changes to Title 3 that make this bill the strongest protection for DeFi and developers ever enacted. We have to pass the Clarity Act to get these protections." However, the latest revisions to the CLARITY Act have not been publicly disclosed. Chervinsky expressed concern that the DeFi protection provisions have been overshadowed by the intense focus on stablecoin rewards provisions within the CLARITY Act. His primary issue with the Senate Banking Committee’s latest draft is that Title 3's definitions of money transmitters could still expose many non-custodial DeFi builders to liability. Despite the CLARITY Act incorporating the BRCA in section 604, which specifies that non-controlling developers and providers of non-custodial software should not be classified as financial institutions subject to Bank Secrecy Act KYC obligations, Chervinsky argued that ensuring non-custodial software developers aren't misclassified as money transmitters remains a critical challenge. His concerns arise amid several high-profile prosecutions and convictions of developers in the U.S. in recent months, including the conviction of Tornado Cash co-founder Roman Storm in August 2025 for conspiracy to operate an unlicensed money transmitting business. U.S. lawmakers have indicated that the CLARITY Act is progressing towards a Senate Banking Committee markup expected in April, following recent bipartisan advancements on stablecoin rewards provisions. Lummis highlighted the necessity of passing the CLARITY Act to ensure DeFi developers receive legal protections under the BRCA.