Senate Updates CLARITY Act With Developer Protections
The CLARITY Act is a central part of Congress’s effort to establish a federal framework for digital assets and reduce regulatory uncertainty for crypto markets, businesses and technology providers. Its treatment of software developers is especially important because broad liability could expose builders of non-custodial tools and decentralized infrastructure to rules designed for financial intermediaries, potentially discouraging innovation in the United States.
The U.S. Senate released its latest version of the legislation with protections for software developers and a new ethics provision as lawmakers continued work on a broader crypto package. The ethics rules include a sunset date in 2029, meaning Congress would need to revisit whether they should be extended or revised. The additions mark the latest step in negotiations over the scope, safeguards and political durability of U.S. digital-asset legislation.
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The history behind this eventUS Senator Urges Leaders to Preserve Developer Protections in Crypto Bill
Protections for cryptocurrency software developers have become a key issue as the U.S. prepares to consider the CLARITY Act. Section 604, the Blockchain Regulatory Certainty Act, is intended to ensure that developers of noncustodial software who do not directly control users’ assets are not treated as money transmitters. The provision is crucial to the development of decentralized finance, or DeFi. Without it, developers could face compliance risks merely for writing open-source code.
U.S. Senator Ron Wyden wrote to Senate leaders John Thune and Chuck Schumer on July 8, 2026, strongly urging them to retain Section 604. Wyden said the provision would not exempt criminal conduct but would prevent law-enforcement resources from being wasted. Some law-enforcement and religious organizations, however, fear it could weaken anti-money-laundering oversight and create legal loopholes, fueling a dispute over whether the protections should remain.
Senate Republicans Unveil Final CLARITY Act Draft as Trump Backs Crypto Ethics Rules
The CLARITY Act is designed to establish a federal framework for U.S. digital-asset markets and clarify regulatory authority over the sector. Ethics provisions have become central to the debate because cryptocurrency holdings and transactions by senior officials could create conflicts of interest. Their inclusion may also prove critical to securing enough bipartisan support for the legislation to advance in the Senate.
Senate Republicans have released what they describe as the final draft of the CLARITY Act, while Trump has agreed to most of its cryptocurrency ethics provisions. The proposed restrictions would limit crypto-related transactions by government officials and their spouses. The measure is scheduled to face a Senate test on Sept. 15, 2026, and will need at least 60 votes to clear the chamber’s procedural threshold.
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