- Democrats filed 100+ anti-DeFi amendments to the CLARITY Act.
- Measures target developer protections, tokenization, and AML rules.
- Warren led with 40 amendments, sparking crypto backlash.
Leading up to Thursday’s markup, Democratic Senators in the Senate Banking Committee have pumped more than 100 anti-Defi amendments to the CLARITY Act. Following the development, the DeFi Education Fund has begun rallying crypto supporters to reach out to their senators to fight this Democratic pushback ahead of tomorrow’s debate.
Democrats Aim to Strip Safe Harbor Protections for Developers
The Defi Education Fund confirmed the Senators behind the anti-Defi initiative to include Senator Elizabeth Warren, Senator Cortez Masto, Senator Andy Kim, Senator Jack Reed, and Senator Kris Van Hollen.
In their collective assault against the DeFi protections in the critical legislation, the lawmakers seek to block protections accorded to software developers that do not control funds and DeFi frontend applications.
In addition, the Democrats want the bill to preclude the BRCA (Blockchain Regulatory Certainty Act) tokenization provisions and broaden the scope of the BSA (Bank Secrecy Act) and AML (Anti-Money Laundering) requirements for digital asset enterprises and software developers.
Particularly, amendment no. 32 by Senator Van Hollen expanded the application of the criminal code to include DeFi developers who distribute, administer, deploy, or publish, or constitute code that aids crime or who act with “reckless disregard for a substantial risk.”
Warren’s Latest Amendments Renew Tensions With Crypto Industry
Out of over 100 amendments, Senator Warren alone filed 40, including one aimed at blocking crypto firms from accessing Fed accounts. In her words, one of her propositions would “close the tokenization loopholes.”
An amendment by Warren seeks to exclude some classes of software developers from DeFi protections in order to “address vulnerabilities to protect national security,” while another seeks to “define financial institutions under anti-money laundering law” to include digital asset companies and developers.
“Among other flaws,” noted Warren, the CLARITY Act will “turbocharge the massive conflict of interests posed by Donald Trump and his family’s crypto ventures.”
Warren’s anti-Defi disposition does not come as a surprise to those who have been intimate with the developments in the crypto space and her close alignment with Wall Street, which has always set her at variance with alternative technologies like crypto.
Senator Reed proposed the subjection of all smart contracts to sanctions without regard to “whether such contracts operate autonomously, can be modified, or are owned.”
Crypto supporters call out Warren for leading the crusade against CLARITY rather than backing digital asset innovation that favors the average American. Many claim she’s supporting the banks, considering how her proposed amendments could limit access to the financial system for everyday Americans and give traditional institutions more leverage.
DeFi groups encourage supporters to maximize the few hours before the markup and urge their Senators to oppose these amendments that are potentially inimical to developers, users, and DeFi technology.
