US Senator Cynthia Lummis has rejected claims that the Digital Assets Transparency Act does not protect decentralized finance innovators from legal consequences, refuting the claim that recent changes to the bill will make it “the strongest protection for DeFi and developers ever enacted.”
Her comments on Friday issued a direct response to cryptocurrency lawyer Jake Chervinsky, who argued that Title 3 of the current bill undermines the Blockchain Regulatory Certainty Act – another cryptocurrency law focused on developer protections – by imposing “know-your-customer” obligations on unregulated software developers.
“Don’t believe the FUD,” Lummis said, adding: “For the last several weeks, we have been working bipartisanly to make changes to Title 3 that will make this bill the strongest protections for DeFi and developers ever introduced. We must pass the Clarity Act to get these protections.”
The latest changes to the CLARITY Act have not been made public.
Chervinsky said these DeFi protection provisions have been overshadowed by the intense focus on the stablecoin reward provisions in the CLARITY Act.
His biggest concern with the Senate Banking Committee’s latest CLARITY Act bill is that Title 3’s definitions of money transmitters may still be revealing unsupervised DeFi builders are liable.
This is despite the CLARITY Act including BRCA in Section 604, which clarifies that non-controlling software developers and providers of uncontrolled software should not be treated as financial institutions subject to KYC obligations under the Bank Secrecy Act.
“The biggest challenge is ensuring that unregulated software developers are not misclassified as money transmitters,” Chervinsky argued.
“For DeFi, this is non-negotiable and still unresolved.”
His concerns follow several high-profile prosecutions and convictions of developers in the U.S. in recent months, including Tornado Cash co-founder Roman Storm, who was convicted in August 2025 of conspiring to operate an illegal money transmitting business.
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U.S. lawmakers said the CLARITY Act is closing in on the margin the Senate Banking Committee expected in April following recent bipartisan progress on stablecoin rewards legislation.
Lummis noted that passage of the CLARITY Act is necessary to provide DeFi developers with legal protections under the BRCA Act.
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