Blockchain groups lobby ahead of CLARITY Act key hearing in Senate

DeFi advocacy group DeFi Education Fund has highlighted some of the proposed amendments that have been submitted by some U.S. senators regarding the proposed crypto legislation known as the CLARITY Act, warning that those amendments are anti-DeFi. 

DeFi Education Fund found eight amendments whose descriptions, it says, would “seriously harm DeFi technology and/or make market structure legislation worse for software developers.”

It called on senators to oppose measures submitted by Senators Jack Reed, Andy Kim, Catherine Cortez Masto, and Elizabeth Warren ahead of the committee’s consideration of the CLARITY Act.

The latest pushback is one of many that have been ongoing with regard to the CLARITY Act, which the Senate is attempting to pass before the 2026 midterm elections.

DeFi Education Fund’s post comes just one day before the Senate Banking Committee markup session, which will address the amendments filed by senators, some of which touch on developer protections, stablecoin yields, and anti-money laundering requirements.

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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