The CLARITY Act Changed Again: New Crypto Bill Impacts DeFi

The CLARITY Act changed again this week, just five days ahead of a crucial Senate procedural vote on September 10. The new 630-page draft includes updated rules for crypto protocols that describe themselves as decentralized but continue to be controlled by a company, founder, or coordinated group. Those platforms may be forced to register with the Commodity Futures Trading Commission (CFTC).

The bill’s effect on genuinely decentralized DeFi is significantly more nuanced. The CLARITY Act preserves protections for non-custodial software development and self-custody while trying to draw a clearer legal line between autonomous protocols and centralized businesses operating under DeFi branding. That distinction may well be the most consequential part of the new CLARITY Act.

Read more: Clarity Act Gets New DeFi Rules as Senate Faces Crucial 60-Vote Crypto Showdown

What Changed in the Latest CLARITY Act?

The September revision makes three important changes related to DeFi.

First, it includes clearer rules for what the bill calls a “non-decentralized finance trading protocol.” If an individual or coordinated group can control or materially alter a protocol, then the project may no longer receive the same treatment as genuinely decentralized DeFi.