Lummis revises CLARITY five days out and leaves the carve-out alone

Senator Cynthia Lummis released a revised text of the Digital Asset Market Clarity Act five days before the Senate votes on whether to take the bill up, and without public backing from the Democrats whose votes decide the outcome, according to The Defiant, with cloture on the motion to proceed to H.R. 3633 set for Tuesday, Sept. 15 at 2:15 p.m. and needing 60 votes under the Senate Democratic leadership's floor schedule.

Republicans hold 53 seats against 45 Democrats and two independents who caucus with them, so if every Republican votes to proceed, seven Democrats carry the motion — the arithmetic The Defiant reported when the bill reached the floor calendar and the arithmetic that governs Tuesday afternoon.

The changes Lummis listed are narrow: trading protocols that are not decentralized must register with the Commodity Futures Trading Commission and comply with the Bank Secrecy Act, mirroring the treatment Section 10301 already gives them on the securities side, where the Securities and Exchange Commission must spell out how operators meet existing intermediary requirements. The decentralized finance title now applies only to spot and cash digital commodity transactions, a scope line that will be argued over in implementation long after the roll call ends. The third change clarifies which digital asset activities credit unions may conduct — the smallest of the three, and the only one addressed to an institution type instead of a market.

The revision leaves the provision law enforcement has objected to since July, exemptions from anti-money-laundering and sanctions requirements for decentralized finance participants, exactly where it was. Lummis frames the package as consensus: "We have incorporated more than 114 separate provisions at my Democrat colleagues' request, and as a result, this bill is a strong bipartisan product," she said in the release, while the changes she enumerated run to three. The distance between those two numbers is the bet this revision is making: that the senators who decide Tuesday want drafting addressed rather than the exemption narrowed. Pulling non-decentralized trading protocols into CFTC registration and the Bank Secrecy Act is a real tightening on one flank, and it is the kind that answers a regulator's complaint, not a senator's.

The release names BlackRock, Fidelity, Franklin Templeton, Goldman Sachs, Charles Schwab and SoFi as supporters, alongside four law enforcement groups: the National Fraternal Order of Police, the National Sheriffs' Association, the National Organization of Black Law Enforcement Executives and the Major County Sheriffs of America. Asset managers and custodians dominate that list, the expected result of a bill assigning the SEC and the CFTC the job of writing intermediary rules; the sheriffs' association is the harder name to square. According to The Defiant, the most recent CLARITY Act document on the association's own site is a July 31 letter to the Senate signed by its president, Sheriff Troy Wellman, asking senators not to vote on the bill as written. "While NSA supports establishing a responsible regulatory framework for the digital-asset marketplace, the legislation's significant law enforcement and public safety risks must be addressed before the Senate votes," the letter says, citing the exemptions for decentralized finance participants. The revised text does not narrow those exemptions, and the gap between the endorsement and the letter is left open by both the release and the association's site as The Defiant describes it.

The text sits on Lummis's site as an amendment in the nature of a substitute to H.R. 3633, the bill the House passed, and runs four divisions: the Banking Committee's ten titles, the Agriculture Committee's digital commodity intermediary titles, an ethics division and an effective date. A substitute of that kind puts the merged committee product in front of the Senate in place of the House text, so Tuesday's motion is one vote about two things at once — whether to debate market structure at all, and whose draft is the starting point. Lummis released the prior version on July 22, merging the Banking and Agriculture committees' work with Banking Chairman Tim Scott and Agriculture Chairman John Boozman.

Congress also holds the clock on more than this bill. This publication noted in August that the SEC shelved its tokenized-securities exemption after pushback from the White House and SIFMA, which left tokenized equities without a compliance path and handed the question to Congress. Tuesday's motion is the Senate's first chance to answer in a roll call rather than a comment letter.

If the 53 Republicans hold together, seven Democrats decide whether the Senate takes up H.R. 3633, and none of the three changes Lummis listed speaks to the exemption the sheriffs' association wrote against. A second draft that narrows that exemption would say plainly what this one was for. The number to watch at 2:15 p.m. is 60.