DEF Warns ‘Anti‑DeFi’ Amendments To CLARITY Act Could Threaten Users, Developer Protections

A DeFi advocacy group has warned about a list of proposed amendments to the long-awaited crypto market structure bill that threaten the sector’s developers and hinder innovation in the US.

CLARITY Act Amendments Could Harm The  DeFi Sector

On Wednesday, the DeFi Education Fund (DEF) shared a list of 16 “anti-DeFi amendments” to the Senate Banking Committee’s crypto market structure bill, known as the CLARITY Act, ahead of its highly anticipated Thursday markup session.

In an X post, the advocacy group warned that some of the recent amendments submitted for consideration could harm DeFi technology, users, and developers if they are implemented in the final text of the legislation.

These amendments came from Democratic Senators Catherine Cortez Masto, Andy Kim, Chris Van Hollen, Elizabeth Warren, and Jack Reed, who collectively targeted core DeFi protections in the bill.

Some of the most notable “anti-DeFi” proposals include amendments by Senators Cortez Masto and Reed targeting the Blockchain Regulatory Certainty Act (BRCA), which exempts non-controlling developers and providers from federal money transfer requirements.

According to DEF’s assessment of the text, Cortez Masto’s amendments “re-write the BRCA to turn it from a shield to a sword against developers,” and “strike protections for non-controlling developers” in Sections 301 and 302.

Reed’s amendments to the CLARITY Act. Source: Chad Steingraber on X

Meanwhile, Reed’s amendments reportedly include a “direct attack on Van Loon – 5th Circuit federal court decision by subjecting smart contracts to sanctions ‘without regard to whether such contracts operate autonomously, can be modified, or are owned.’” In addition, he proposed eliminating the BRCS from the CLARITY Act.

Other related amendments also target DeFi front ends, tokenization provisions, and expand BSA/AML obligations for developers and digital asset businesses.