US Senate Gets Revised CLARITY Act Ahead of September 15 Vote

Senate Republicans released an updated 630-page draft of the CLARITY Act on September 10, five days before a procedural Senate vote scheduled for September 15. The revised text includes more than 100 changes requested by Democrats.

To advance, the bill needs support from at least 60 senators, meaning Republicans cannot pass it alone and must win over at least some Democrats, many of whom remain undecided. If the procedure succeeds, CLARITY Act would draw jurisdictional lines between the SEC and CFTC, effectively legalize most cryptocurrency activity across the United States, and clear the way for startups to raise funds through token sales again.

Who is behind the updated text

Senator Cynthia Lummis of Wyoming, who has led negotiations since summer and is widely seen as the bill's chief architect in the Senate, unveiled the revised version. She said the text reflects "bipartisan hard work over August" and incorporates more than a hundred Democratic requests. The draft was posted on her personal website rather than routed through committee first, underscoring the time pressure ahead of September 15.

Lummis urged Democrats to support the bill, noting it includes nearly everything they asked for, namely a felony bar on fraudsters, extra funding for the CFTC, and stricter rules for large platforms such as Binance. "Now they need to vote for the bill they built. Anything less is walking away from their own work," she wrote on X.

A new rule for "decentralized-in-name-only" protocols

The central substantive change targets DeFi protocols. If a protocol's functionality, operation, or rules can be materially altered by a specific person or a coordinated group, it will be treated as non-decentralized and required to register with the CFTC. The definition also covers projects whose controllers can restrict users or whose transactions are not governed solely by transparent, pre-established code.

For such protocols, the SEC and CFTC must write separate rules covering registration, participant conduct, disclosure, recordkeeping and supervision. The drafters carved out an exception, so the software and distributed ledger systems themselves are not required to register. Sitting on an incident-response or security council does not, by itself, establish control over a protocol either. DeFi provisions were also narrowed to spot and cash transactions, a direct response to concerns raised by Native American groups over prediction markets, which fell under broader wording in earlier drafts.

For the industry, this marks a shift away from the current pattern, where the line between "sufficiently decentralized" and "non-decentralized" was effectively drawn through SEC enforcement lawsuits, toward criteria written down in advance. Protocol developers have long complained about exactly this uncertainty. Some teams stayed unsure for years whether their smart contract counted as a security. The new text does not settle the question completely, but it gives the CFTC and SEC written benchmarks to work from for the first time.

Ethics provisions barely changed

The ethics section, one of the main sticking points in negotiations, is nearly identical to the July draft. It bars public officials, government employees and their spouses from issuing or sponsoring digital assets. Democrats are pushing for broader restrictions tied to President Donald Trump's crypto interests, and according to a Politico report, none currently back the bill as written, despite the more than one hundred changes accepted elsewhere in the text.

Democratic Senator Ruben Gallego warned back on August 20 that rushing the vote without resolving the ethics and stablecoin-yield disputes could backfire. His words proved prescient, since those exact two issues remain unresolved five days before the vote.

"A fast vote gets you a fast result, but I'm not sure it's the result you want."

- Ruben Gallego, Democratic senator from Arizona, statement from August 20, 2026

Banks versus yield-bearing stablecoins

Alongside the ethics fight, another sore point remains in the text. It concerns rules on rewards for holding stablecoins such as USDT. Community banking groups worry that yield-bearing stablecoins would pull deposits out of traditional banks, and they have spent weeks lobbying senators in their home states. Industry group Stand With Crypto is running a counter-campaign. It says supporters contacted lawmakers nearly 50,000 times in August alone.

Neither side has a clear edge in this standoff yet, and it, rather than the technical DeFi language, may end up deciding how a handful of centrist senators vote.

Industry backing and the risks of failure

Coinbase CEO Brian Armstrong told CNBC the bill was "ready to get a yes vote." The exchange's main concerns had already been addressed, he said, while ethics negotiations continued and "appeared close to a solution." He did not specify which provisions had changed. Crypto Council for Innovation CEO Ji Hun Kim called Tuesday's vote a "pivotal moment" for the industry, innovation and US leadership in digital assets, and called for a framework that combines consumer protection with business conduct standards.

For exchanges and funds, passage would mean shifting away from regulation-by-enforcement, where rules were effectively written through lawsuits against individual companies, toward registration requirements known in advance. Industry groups argue that predictability matters more than how strict the final rules turn out to be. Still, several outcomes remain on the table, and not all of them favor the crypto market:

• Without 60 votes, the procedural motion fails and the bill stalls until the next congressional session.
• A regulatory workaround: Armstrong suggested that if the bill fails, the SEC and CFTC could pursue rulemaking and innovation exemptions on their own existing authority, bypassing Congress entirely.
• The ethics dispute alone could cost Democratic votes even if the rest of the text has broad support.
• Banking lobbyists will keep pushing back on stablecoin-yield provisions regardless of the September 15 outcome.

What comes next

The September 15 vote is the first real test of whether the Senate can move the largest crypto regulatory bill in years. The 630 pages and more than a hundred amendments show how far Republicans have gone to compromise, yet the ethics section and the stablecoin-yield fight remain the same barrier they were a month ago. If the procedure clears, a full vote on the substance follows. If not, the bill's fate shifts to regulators and the next congressional session, and the market keeps trading under the same regulatory uncertainty as before.