In the United States, efforts to regulate the crypto industry are turning into cacophony. After the Genius Actit is now the Clarity Act which agitates Washington. This text, supposed to clarify the structure of the digital market, has transformed into a political and ideological battlefield. Senators, banks, platforms and developers are confronting each other with amendments and declarations. And while the law stagnates, DeFi feels threatened, stuck between regulators and traditional finance.
In brief
- The Clarity Act aimed for clarity, it plunges DeFi into American regulatory uncertainty.
- Coinbase blocks the legislative process, revealing the growing political power of the crypto sector.
- Section 604 creates a legal standoff between open source developers and US senators.
The Clarity Act: a promise of clarity that has become a gray area
Originally, the Digital Asset Market Clarity Act Or Clarity Act was to give the United States a modern framework for digital assets. Presented by Senator Tim Scott, the project wanted to protect consumers while strengthening national security. Except that in practice, the law has the opposite effect.
The DeFi Education Fund, very active on X, denounced a series of amendments capable of destroying DeFi technology and worsening legislation for developers. These changes, notably amendments 42 and 45, would authorize the Treasury to sanction smart contracts and impose identity checks (KYC) on developers who often have no contact with users.
In the thread, Jake Chervinsky, a lawyer recognized in the crypto-sphere, did not mince his words :
The latest draft leaves ambiguity that all kinds of developers and infrastructure providers could be forced to verify user identities, register with the SEC, or comply with other rules that don't fit with DeFi. On this point, zero tolerance for ambiguity.
This text, supposed to clarify the rules, therefore plunges developers into a worrying legal fog. The paradox is obvious: the promised “clarity” becomes a political and technical headache, which threatens the vitality of decentralized finance.
Coinbase against Congress: when crypto emerges as a political force in the United States
The episode of Clarity Act marks a historic break. For the first time, a major crypto player, Coinbase, has publicly blocked a federal initiative. A simple message from its CEO, Brian Armstrong, on X was enough to push the Senate Banking Committee to suspend the session planned to vote on the law.
The jurist Carlo D'Angelo summarized the scene in a long post that went viral :
The sudden collapse of the CLARITY Act markup was not a mere procedural delay in the legislative process. It was an eye-opening moment in Washington, one that highlighted both the growing power of the crypto lobby and the increasingly visible fault lines between crypto, banking and traditional finance.
Behind this episode, a reality: crypto now has real political power. Coinbase acts as a center of gravity, bringing together developers, investors and crypto NGOs.
But the maneuver also fractured the industry. Platforms like Kraken have criticized Brian Armstrong for stopping an imperfect but necessary process. This disagreement reveals a paradox: crypto demands regulation, but fears that it will come too quickly and in the wrong direction.
In the United States, this standoff shows that crypto regulation is no longer a technical question, but an issue of power. And it is DeFi which risks paying the price.
Section 604, stablecoins and the war of influence: the hidden battle of the Clarity Act
Behind the suspension of voting lies a cold war between two congressional committees. The Banking Committee, led by Tim Scott, defends a pro-developer approach. But the Judiciary Committee, embodied by Senators Grassley and Durbin, accuses the project to open a “dangerous breach” in the fight against money laundering. Their letter denounces the famous Section 604, which would exempt certain creators of open source software from financial licensing, at the risk – according to them – of protecting players like Tornado Cash.
Opposite, Cynthia Lummis defends another text, the Blockchain Regulatory Certainty Actwhich aims to protect those “who simply write code without ever touching user funds”. A clear line: defend the neutrality of the code in the face of criminalization.
The debate also extends to stablecoins, a new battleground between banks and crypto firms. The former want to limit returns and programmability to maintain monetary control. The latter denounce an attempt to expropriate innovation. For Todd Phillips, this opposition is a zero-sum game : if banks win, crypto loses.
The key points of the Clarity Act and the DeFi crisis
- Suspension of voting: no resumption date has been set;
- Section 604: at the heart of the conflict between banks, senators and developers;
- Coinbase: first crypto player to block a federal initiative;
- DeFi Education Fund: alert on anti-DeFi amendments;
- Stablecoins: new frontline between traditional finance and crypto.
The United States is still trying to find the right balance between innovation and security. And while the Clarity Act gets bogged down, another debate resurfaces: the regulation of stablecoins. Players like JPMorgan point out that the Genius Act remains the best basis for regulating these digital assets and avoiding a prolonged legal vacuum.
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