Senators file Clarity Act amendments on DeFi, Trump ties, Epstein

Senators filed dozens of amendments to the Clarity Act in the final 24 hours before the Senate Banking Committee’s Thursday vote. Committee members will vote on each amendment before deciding whether to advance the bill to the full Senate.

The Clarity Act would create a legal framework for most cryptocurrency activity in the United States. The new amendments address stablecoin reward programs, decentralized finance compliance, protections for software developers, potential conflicts tied to the president’s family, national security steps and non-crypto policy changes.

Sen. Jack Reed (D-R.I.) submitted an amendment using language from the banking industry that would require the committee to take a position on rewards programs for dollar-pegged stablecoins. The banking sector has criticized such programs for their potential impact on deposits and financial stability, while crypto firms supported the Clarity Act’s original language on the issue.

Sen. Elizabeth Warren (D-Mass.) proposed barring federal approval of banking-related applications from institutions tied to the president, the vice president, members of Congress or their immediate families, and preventing those individuals from owning or controlling banks. The amendment responds to an application earlier this year by World Liberty Financial, a company linked to the Trump family seeking a bank charter.

Sen. Andy Kim (D-N.J.) offered an amendment to re-establish a National Cryptocurrency Enforcement Team to investigate crypto ventures with direct ties to the president and immediate family. Sen. Tina Smith (D-Minn.) proposed language that would prohibit the federal government from providing financial assistance to prevent failures or bankruptcies at crypto firms.

Several amendments would change how DeFi is regulated and how developers are treated. Sen. Kim proposed requiring businesses that derive significant revenue from DeFi platforms to implement proactive anti-money-laundering and sanctions compliance programs and would give the government authority to sanction transactions involving U.S.-dollar-backed stablecoins. Sen. Warren proposed allowing the government to blacklist platforms that facilitate more than one illicit transaction. Sen. Reed filed an amendment to eliminate the Blockchain Regulatory Certainty Act, a provision that currently exempts many DeFi protocols from new rules and shields software developers from criminal prosecution. Developer groups have highlighted amendments they oppose.

Republican senators also filed amendments. Sens. Bill Hagerty (R-Tenn.) and Dave McCormick (R-Pa.) proposed creating a permanent Digital Asset Cyber Innovation Center at the Treasury Department to counter crypto-related threats from hostile state actors. Hagerty also filed language to ban the federal government from issuing a central bank digital currency. Non-crypto proposals include Hagerty’s housing regulation changes, Sen. Katie Britt’s (R-Ala.) plan to raise merchant swipe fees to support community banks, and Sen. Warren’s amendment to cap credit card interest rates at 10% for one year.

Warren additionally introduced an amendment requiring federal banking regulators to release any records in their possession related to Jeffrey Epstein and alleged co-conspirators within 90 days of the Clarity Act’s passage.

A D.C. insider described one bank-friendly amendment as “a nice little treat on the side” for community banks that view stablecoin reward programs as a competitive threat.

The committee must vote on each amendment and then take a final vote on whether to send the Clarity Act to the Senate floor. Some pro-crypto Democrats have indicated they will withhold broader support unless specific language addressing presidential ties to crypto is secured before the hearing. The Thursday votes will set which amendments become part of the bill as it moves to wider Senate consideration.