Blockchain Lobbying Intensifies as CLARITY Act Faces Critical Senate Hearing

Washington's corridors are buzzing—crypto's biggest players are mounting a last-ditch offensive. The Senate gavel is about to fall on the CLARITY Act, and the industry's future hangs in the balance.

The Lobbying Blitz

Blockchain associations and coalitions have deployed teams across Capitol Hill. Meetings stack up—lawmaker offices, committee staff, sympathetic senators. The message is consistent: don't strangle innovation with blunt regulation. They're pushing for clear, tailored rules that recognize digital assets as a new asset class, not a square peg for old regulatory holes.

What's at Stake in the Hearing

The CLARITY Act aims to define jurisdictional boundaries between the SEC and CFTC. For crypto firms, the devil is in the definitions. Is a token a security or a commodity? The answer dictates everything—from reporting requirements to which agency gets to play cop. The hearing will grill witnesses on consumer protection, market stability, and that ever-present specter: systemic risk.

The Finance World Watches—and Scoffs

Traditional finance eyes the scramble with a mix of curiosity and contempt. One Wall Street veteran quipped, 'They spent a decade bragging about bypassing banks—now they're begging for a rulebook from the very institutions they wanted to obsolete.' It's the ultimate irony: decentralization's champions lobbying centralized power for survival.

The outcome won't just shape US policy. It'll send a global signal. Will America provide clarity, or chaos? The Senate committee holds the pen.

What are the proposed amendments to the CLARITY Act?

DeFi Education Fund singled out proposals that would authorize Treasury to sanction smart contracts, narrow definitions of non-controlling developers, and expand FinCEN authority over blockchain platforms.

The group warned that Amendment 42, submitted by Senators Reed and Kim, would grant Treasury powers to sanction “smart contracts and centralized platforms facilitating illicit activity.” It also flagged while Amendment 75 by Senator Cortez Masto for proposing to prohibit transactions with unlawful DeFi protocols.

“We’re very conscious of how illicit finance is treated in the bill, but we need to make sure that there are not obligations put on codes instead of person, or make sure that there isn’t some inadvertent way that the technology is burdened in a way that it can’t comply,” Amanda Tuminelli, chief legal officer at the DeFi Education Fund, told CNBC.

The group has partnered with Stand with Crypto to score senators based on how they vote on amendments affecting DeFi and self-custody rights.

Senator Warren, who is one of the leading critics of the legislation, has submitted more than 20 amendments. DeFi Education Fund pointed out that the senator made Amendment 104, where she struck out “gratuitous distribution carveout for crypto offerings.”

Committee moves to debunk myths surrounding CLARITY Act

The Senate Banking Committee, led by Republican Chairman Tim Scott, released a “Myth vs Fact” document this week.

The committee debunked the myth that “the bill enables illicit finance to occur through decentralized finance (DeFi) trading protocols.”

The committee stated that the bill does the opposite. “It targets illicit activity while protecting lawful software development and innovation,” the committee wrote, adding that “code is protected — misconduct is not.”

The committee also debunked the myth that “the bill puts banks, taxpayers, and the financial system at risk.” It stated that “at its core, this is an investor protection bill. It brings digital assets into a clear regulatory framework, where bad actors are held responsible for fraud, manipulation, and abuse.”

According to the committee, the bill is designed to prevent a repeat of the FTX collapse and provide a “regulatory framework where investors are informed about material risks, insiders are prevented from manipulating markets, and bad actors are penalized.” It went further to clarify five other myths that have spread with respect to the bill.

The House passed its version of the CLARITY Act in July 2025 with bipartisan support by a vote of 294 to 134.

November midterm elections loom large

Cryptocurrency exchange Coinbase has threatened to withdraw support if the Senate introduces restrictions on stablecoin rewards.

However, critics of the framework have claimed that it largely benefits established players such as Coinbase and Circle at the expense of smaller innovators.

Crypto advocates admit the urgency of speeding up this legislative push, with one eye on the November midterm elections. Depending on how those votes go, a lot of the legislative progress achieved could skid off the rails under a less conducive political climate.

The Senate Banking Committee and the Senate Agriculture Committee are expected to hold respective hearings on Thursday, January 15, 2026, on the CLARITY Act and also consider possible amendments.

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