US lawmakers pause the CLARITY Act as DeFi leaders warn the bill still risks developers, DAOs rethink governance and regulators face mounting pressure.
United States lawmakers postponed a planned markup of the Digital Asset Market Clarity Act (CLARITY), delaying progress on a bill intended to define how cryptocurrencies and decentralized finance (DeFi) platforms are regulated and prompting renewed pushback from DeFi leaders who say the bill still fails to adequately protect developers.
Industry groups and crypto venture firms warned that proposed amendments could impose requirements that are not suitable for decentralized systems. Representatives from Paradigm and Variant said the current draft leaves unresolved ambiguity over whether DeFi developers and infrastructure providers could be forced to implement Know Your Customer (KYC), register with financial regulators or comply with rules designed for centralized platforms.
The delay follows mounting criticism from across the crypto sector, including public opposition from Coinbase CEO Brian Armstrong, which led Senate Banking Committee Chair Tim Scott to announce a “brief pause.”
