Lummis Defends CLARITY Act Against Criticism
US Senator Cynthia Lummis has pushed back against criticism of the Digital Asset Market Clarity Act (CLARITY Act), stating that recent revisions will provide the “strongest protection” ever for decentralized finance (DeFi) developers.
Her response came after concerns raised by crypto lawyer Jake Chervinsky, who argued that the bill’s current draft could still expose non-custodial software developers to legal risks. In particular, he pointed to Title 3, suggesting it may impose know-your-customer (KYC) requirements on developers who do not control user funds.
Lummis dismissed these concerns as unfounded, urging the crypto community not to “believe the FUD” (fear, uncertainty, and doubt). She emphasized that bipartisan efforts in recent weeks have significantly improved the bill, especially in terms of developer protections. According to her, passing the CLARITY Act is essential to securing these safeguards.
Although the updated draft has not yet been made public, Lummis remains confident that it strengthens protections for DeFi innovators and aligns with the broader goal of regulatory clarity in the crypto space.
Ongoing Concerns Around Developer Liability
Despite Lummis’ assurances, Chervinsky maintains that key issues remain unresolved. His main concern is that the definition of “money transmitter” in Title 3 could still be interpreted broadly enough to include non-custodial developers—those who create software but do not handle user funds.
This is particularly significant because the CLARITY Act incorporates elements of the Blockchain Regulatory Certainty Act (BRCA), which aims to ensure that developers of non-custodial software are not treated as financial institutions under the Bank Secrecy Act. However, Chervinsky argues that conflicting language within the bill could undermine this protection.
“The biggest challenge is ensuring non-custodial developers aren’t misclassified,” he noted, calling the issue “non-negotiable” for the future of DeFi.
These concerns are not just theoretical. Recent legal actions, including the conviction of Roman Storm, have heightened anxiety within the crypto community. Storm was found guilty in 2025 of operating an unlicensed money-transmitting business, raising questions about how far liability can extend for developers.
Meanwhile, lawmakers indicate that the CLARITY Act is moving closer to a Senate Banking Committee review, expected as early as April. Progress has reportedly been made through bipartisan agreement, particularly around stablecoin-related provisions, which have drawn significant attention.
