CLARITY Act explicitly leaves DeFi rules blank, risking a total retail protection collapse if negotiations fail

The post CLARITY Act explicitly leaves DeFi rules blank, risking a total retail protection collapse if negotiations fail appeared on BitcoinEthereumNews.com.

David Sacks announced on Dec. 18 that Senate Banking Chair Tim Scott and Senate Agriculture Chair John Boozman confirmed a January 2026 markup for the CLARITY Act. “We look forward to finishing the job in January!” The problem: a January markup isn’t finishing anything. It’s the opening move in a multi-year pipeline where the most contested questions haven’t been resolved, and statutory language still sits in brackets. The real work won’t begin until the bill clears a Senate floor vote, conference negotiations, and a presidential signature. The CLARITY Act passed the House in July alongside the GENIUS stablecoin bill. It now sits in the Senate Banking Committee, where two separate drafts must be merged before any markup can occur. Those drafts still have bracketed definitions of what counts as a “security” and how much DeFi infrastructure falls within the regulatory perimeter. They also leave open how intrusive reporting requirements become for trading venues. A January markup means staff agreed to start negotiating. It doesn’t mean the hard decisions are made. The split and what’s still moving CLARITY’s core move divides crypto into three buckets. “Digital commodities” are tokens tied to blockchain systems, such as payments, governance, and network incentives, excluding securities and stablecoins. “Investment contract assets” are digital commodities sold for capital-raising. They start as securities under SEC jurisdiction at issuance, then lose security status in secondary trading and flip to CFTC oversight. “Permitted payment stablecoins” are national-currency tokens issued by supervised entities that tie into the GENIUS framework. That hands the CFTC exclusive jurisdiction over digital commodity spot markets, beyond its current anti-fraud remit. The SEC keeps authority over issuers and offerings of investment contract assets. Meanwhile, banking regulators supervise stablecoin issuers. The lines on the field are inked, but some markings are still in pencil. “Security” itself sits…