‘CLARITY Act will improve’ – Lawmakers adopt developer protections into crypto bill
The odds of passing the crypto bill increased by 23% in May, underscoring renewed market optimism.
The much-awaited crypto market structure bill, the CLARITY Act, has seen positive momentum in May. Now, even the previously contested software developer protections provision has been reportedly adopted.
On Monday, Senator Cynthia Lummis, one of the leading champions of developer protection, said,
Clarity Act is the most pro-law enforcement digital asset bill Congress has ever considered. Let’s get this done!
Will the CLARITY Act now move forward?
The Blockchain Regulatory Certainty Act (BRCA) seeks to exclude decentralized applications or individuals running nodes that support them from being treated as money transmitters.
The BRCA argues that, provided operators or developers have no control over the user funds, then they should not be categorized as money transmitters.
Notably, Section 1960 is a federal statute that prosecutes any person running an ‘unlicensed money transmitting business.’ The BRCA, first introduced by Sen. Lummis earlier this year, seeks to define the scope of Section 1960 to protect legal developers.
The move followed the crypto industry outcry following the prosecution of the founders of privacy-focused decentralized platforms Samourai and Tornado Cash.
BRCA supporters argued that the justice system should go after criminals like North Korean threat actors using platforms like Tornado Cash, not the developers.
Notably, law enforcement agencies had reportedly raised concerns about the provision. If a compromise has been reached on the issue, then the remaining contention will be the stablecoin yield deal and ethics language.
CLARITY Act passage odds surge to 69%
That said, it was not yet clear whether banks would support the Senate Banking Committee markup, scheduled for Thursday. Over the weekend, the banking industry group expressed dissatisfaction with the latest stablecoin yield deal, despite blocking rewards on idle balance.
Despite the last-minute uncertainty, the market appeared optimistic for the bill’s passage. As of writing, Polymaret was pricing a 69% chance that the bill could be signed into law this year.
This was a 23% improvement in May, suggesting that the market was overly optimistic after the latest compromises and deals.
In fact, President Donald Trump’s crypto advisor, Patrick Witt, underscored that the bill will get better ahead of the Thursday markup. Reacting to the deal on the developer protections, Witt said,
The deals will continue until CLARITY improves.
Final Summary
- Senator Cynthia Lummis confirmed that the developer protections have been adopted into the latest draft of the CLARITY Act.
- The provision will shield developers who don’t control users’ funds from money transmitter rules, but stablecoin yield and banking concerns remained unresolved.
