The US Senate has postponed its vote on the CLARITY Act, scheduling the next consideration of the bill for September. The delay extends a period of regulatory uncertainty for decentralized finance (DeFi) platforms and developers, according to a detailed analysis by Maylea Ma, Senior Legal Counsel at 1inch.
ETH
SOL
BSC
ROBINHOOD
USDT
AAPLRegulatory concerns in crypto market structure
Ma examined the draft provisions of the market structure legislation, particularly those impacting developers, non-custodial software users, and users who retain control of their assets. She emphasized that the longer the Senate holds off on crypto-focused market structure law, the more years the industry potentially remains under unclear regulatory expectations.
In her commentary, Ma questioned whether the proposed federal regulatory plan would truly provide better clarity for DeFi participants than the current fragmented approach. She pointed out that the current version of the CLARITY Act includes some protections for non-custodial software developers. These protections are especially significant for protocols and services where the user, not an intermediary, retains control of funds.
Ma contended that while the bill is imperfect, “an imperfect but protective framework still beats regulatory uncertainty for market participants and developers building non-custodial technologies.”
She highlighted regulatory provisions regarding the Blockchain Regulatory Certainty Act (BRCA) and rules distinguishing non-custodial applications from traditional financial institutions. This differentiation is seen as essential for DeFi services that operate without holding users’ funds. According to Ma, legal clarity on these boundaries can impact service provider responsibilities and the development of decentralized technologies.
Changing protections for developers
Discussions in the Senate have already led to changes that reduce some of these protections, Ma noted. She stated that as negotiations continue, the final wording of the act will be critical. For 1inch, the main goal is to ensure that the law maintains a clear division between software developers and financial intermediaries—protecting those who create code from burdens that apply to custodial institutions.
The central issue is whether software code that does not take custody of user funds should face regulatory requirements usually reserved for companies safeguarding client assets. The debate over this distinction has become a core concern in ongoing Senate discussions on the CLARITY Act.
Industry reaction and next steps
Ma argued that, given current conditions, passing the CLARITY Act—even with its flaws—might offer a more predictable environment for developers than continued reliance on agency decisions and enforcement actions. She also acknowledged that some companies, including Coinbase, have expressed concerns about the bill’s language, suggesting it could have negative consequences for parts of the crypto industry, especially DeFi platforms.
For Ma, a bill with imperfections “could still be preferable to the absence of statutory guidance, which would leave the sector subject to changing agency interpretations and enforcement policies.”
The legislative process will continue in September, when the Senate is set to hold a cloture vote on the CLARITY Act. Sixty votes will be needed to advance the bill, making bipartisan support essential. Ma warned that additional postponements could occur, keeping the DeFi sector in a state of limbo for the foreseeable future.
This uncertainty has heightened the importance for industry stakeholders to monitor the evolving legal landscape and potential regulatory shifts. As developments unfold, investors and companies increasingly look for solutions that bypass traditional intermediaries. While traditional markets rely on complex brokers, a massive shift is underway as Wall Street moves toward Web3. Investors are starting to use platforms such as 1stepSwap to store shares of major US companies, gold, and silver directly in their crypto wallets. By tokenizing real-world assets and automatically securing the best market rates, these platforms eliminate middlemen entirely.
The Senate’s upcoming decisions may thus shape not only compliance requirements for developers and non-custodial services but also the broader direction of decentralized finance in the United States.
