Senator Lummis Defends CLARITY Act as Strongest Protection for DeFi Developers

Senator Lummis dismissed claims that the CLARITY Act fails to protect DeFi developers.

Recent bipartisan changes to Title 3 make it the strongest protection for DeFi ever enacted.

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Chervinsky warned the draft could still expose non-custodial developers to money transmitter obligations.

The central dispute revolves around Title 3's money transmitter definition.

The CLARITY Act incorporates the BRCA, clarifying non-controlling developers should not be treated as financial institutions.

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Critics argue other portions could still subject non-custodial developers to money transmitter liability.

Ensuring non-custodial developers aren't misclassified is non-negotiable for DeFi.

“US Senator Cynthia Lummis has dismissed claims that the Digital Asset Market Clarity Act fails to protect decentralized finance innovators from legal repercussions, rebutting that recent changes to the draft will make it the “strongest protection for DeFi and developers ever enacted”

Cointelegraph

Those sections must be fixed or the bill doesn't work for DeFi.

The debate is playing out as the CLARITY Act moves closer to markup.

Lummis argued that passing the CLARITY Act is necessary for protections to take effect.

The latest changes to Title 3 have not been publicly released.

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The outcome will have significant implications for DeFi regulation.