Supporters of the Clarification Act fight back, and the opposition stands firm on the latest draft

Differences in the crypto industry over draft amendments to the Digital Asset Market Clarity Act intensify

Currently, the crypto industry has serious differences over the draft amendment to the Digital Asset Market Clarity Act (referred to as the "Clarity Act"). The draft was released Sunday night and aims to pave the way for a Senate closing debate vote on Tuesday (September 15). In addition, 18 state attorneys general from both parties formally opposed it, warning that the bill could provide asylum to scammers.

This last-minute change is aimed at ensuring that the bill gets the 60 votes needed to move forward. Two of the most controversial parts of the legislation-immunity from criminal liability for software developers and treatment of stablecoin rewards-have been redrafted. However, these changes did not fully quell the doubts of all parties.

Developer Equity: What is retained and what is lost?

The most obvious focus of controversy is the Blockchain Regulatory Uncertainty Act (BRCA), which will be included in the Clarification Act. Jason Somensatto, policy director at the advocacy group Coin Center, pointed out that the new section 10604(c) still exempts "non-controlling blockchain developers or providers" from being classified as money transmission businesses, money transmission operators under FinCEN supervision, or financial institutions. Somensatto believes this will codify the control-based testing standards proposed by the Financial Crimes Enforcement Network (FinCEN) in its 2019 guidance document and prevent over-expansion of regulation in the future.

The new draft deletes the original 18 U.S.C. Clear protection of criminal liability in Section 1960, which covers unlicensed money transfers. Alex Thorn, head of company-wide research at Galaxy, pointed out on the X platform (formerly Twitter) that all references to 18 USC 1960 in the new text have been removed. Somensatto expressed "deep disappointment" by this, pointing out that the developers of Tornado Cash and Samourai Wallet were sued under this clause. Meanwhile, Michael Lewellen, a blockchain expert and researcher at the Coin Center, is filing a separate lawsuit with the Department of Justice (DOJ) seeking a declaratory judgment confirming that writing and maintaining unmanaged software is not a crime. Somensatto said the case is now particularly important.

From "Disappointing" to "Wise Compromise"

He is not the only one who disappointed Somensatto. Reporter Eleanor Terrett reported that she said in an interview that "disappointing" was the common evaluation of the BRCA changes by many industry insiders who refused to disclose their identities. However, there are also voices in support of these revisions. Lawyer Gabriel Shapiro wrote that the odds of a vote on Tuesday's closing arguments "look good." He believes that replacing the outright ban with a circuit breaker mechanism to deal with stablecoin rewards is a "wise compromise."

Senior officials from the Ministry of Finance also expressed support for the bill. Treasury Secretary Scott Bessent posted that the "Clear Act" is crucial for the United States to win the global technology race, and linked it to the earlier passage of the GENIUS Act (for stablecoins). Although stablecoin-related provisions still face criticism, Christopher Williston, chairman of the Independent Bankers Association of Texas, dismissed the revised earnings text released Monday as a "joke" and "meaningless empty content."

State prosecutors warn of fraud loopholes

New York Attorney General Letitia James led a bipartisan coalition of 18 state attorneys general to send letters to Senate Banking Committee Chairman Tim Scott and Ranking Member Elizabeth Warren calling for a negative vote on the current version of the bill. Their concern is the issue of federal priorities. The letter argued that the definition of "qualified transaction" in the Clarification Act would allow the Securities and Exchange Commission (SEC) to override a state's registered jurisdiction, weakening what state attorneys general call the first line of defense against fraud.

They cited FBI data: The amount stolen through cryptocurrency last year reached $11.4 billion, a 22% increase from the previous year, with an average reported loss of $62,604. James said states have launched more than 330 anti-fraud enforcement actions in this area since 2017. The coalition crosses party lines, with Republicans such as Kris Kobach of Kansas and Andy Wilson of Ohio co-signing the letter along with James and Rob Bonta of California.

Forecasting markets and ethical issues remain controversial

Two other battles continued into the voting stage. The Indian Gaming Association opposes language that excludes forecast markets from the DeFi exemption. Chairman David Z. Bean said in a statement on Monday that the changes "do not address the Indian nation's problems," which the group warned was the largest extension of the Commodity Futures Trading Commission's authority since the Dodd-Frank Act of 2010. Senator Cynthia Loomis, one of the main sponsors, countered that Bean had not expressed opposition during the June meeting.

On the ethical front, Thorn pointed out that the bill's sunset clause has been removed, making the ban permanent, broader and enforceable by state attorneys general. It has been reported that President Donald Trump agreed to stricter ethical rules to preserve the bill. Senator Chris Van Hollen remained skeptical, pointing out in his post that the text contained "loopholes" that could "contribute to Trump's cryptographic corruption." Senator Bernie Moreno countered that Van Hollen had not attended any meetings on the legislation in the past 18 months and that the bill contained strict ethical provisions.