New Clarity Act Text Puts DINO DeFi on the CFTC

Senate Republicans released a 630-page rewrite of the CLARITY Act on September 10 that forces decentralized-in-name-only DeFi protocols onto CFTC books. The draft also limits the DeFi shield to spot and cash trades. Ethics language, stablecoin yield and a fight over one-stop crypto firms were left as they were.

The Senate’s first test is a cloture vote at 2:15 p.m. ET on September 15. That ballot does not make a law. It only asks whether 60 senators will even start debate on H.R. 3633.

The New Text Puts Admin-Key DeFi on CFTC Books

Cynthia Lummis, the Wyoming Republican who chairs the Senate Banking subcommittee on digital assets, put out updated text for the Digital Asset Market Clarity Act after talks over the August recess. Her office listed three changes: when non-decentralized DeFi must register with the Commodity Futures Trading Commission and follow the Bank Secrecy Act, a rule that DeFi language covers only spot and cash digital commodity trades, and a clearer path for credit unions.

She said the package takes in more than 114 separate changes Democrats asked for. On X she used the phrase that will follow this bill onto the floor: decentralized-in-name-only protocols.

This updated Clarity Act text reflects bipartisan hard work over August—specifying when decentralized-in-name-only DeFi protocols must register with the CFTC and limiting the DeFi provisions to spot and cash transactions, in response to Native American concerns about prediction…

— Senator Cynthia Lummis (@SenLummis) September 10, 2026

Nearly a decade ago, Wyoming wrote the blueprint for digital asset regulation, and this bill finally brings that clarity to the rest of the country. We have incorporated more than 114 separate provisions at my Democrat colleagues’ request, and as a result, this bill is a strong bipartisan product. Unlike rulemaking, legislation gives this industry a lasting solution that shields it from the whiplash of changes in the White House.

Cynthia Lummis, U.S. senator, September 10 statement

The circulating draft treats a protocol as non-decentralized when a person or group acting together can control or materially change how it works, how it runs, or how it reaches consensus. Those protocols would register with the CFTC. The CFTC and Treasury would then write the implementing rules, in line with section 10301 of the Banking title.

HOW A PROTOCOL FAILS THE DEFI TEST

• Control rights: Someone can control or materially alter the protocol’s functions, operations, or consensus rules.
• Hidden discretion: The system does not run only on pre-set, transparent, encoded rules.
• Censorship power: Someone can restrict or block other people’s use of the protocol.

A protocol that fails that test does not keep the DeFi carve-out. It becomes a CFTC registrant with Bank Secrecy Act duties, the same family of rules that already sit on digital commodity brokers, dealers, and exchanges in the House-passed architecture. Genuine self-custody and code that no one can steer were meant to stay outside that net. Admin keys, upgrade rights and freeze switches were not.

A Spot-and-Cash Limit After Tribal Pushback

Lummis said the DeFi title now applies only to spot and cash digital commodity trades, “in response to Native American concerns about prediction markets.” That sentence is narrower than the ask tribal governments took to the Senate.

On August 4, the Senate Committee on Indian Affairs held a roundtable on prediction markets and tribal gaming. Tehassi Hill, vice chairman of the Indian Gaming Association and chairman of the Oneida Nation, told lawmakers tribal nations oppose sports and casino-style gambling offered through prediction markets outside the Indian Gaming Regulatory Act. Mark Macarro, chairman of the Pechanga Band of Indians, put the money in one line.

Every dollar diverted to gaming-like prediction markets is a dollar pulled away from tribal jobs, facilities, and community programs.

Mark Macarro, chairman, Pechanga Band of Indians, Senate Indian Affairs roundtable, August 4, 2026

The American Gaming Association, the Indian Gaming Association and hospitality unions had already pressed senators in June to keep sports betting with states and tribes, not with the CFTC. AGA chief executive Bill Miller told a May hearing that tribal gaming supported 680,000 jobs in 2025. Sen. Tina Smith of Minnesota said Congress could state, in the Clarity Act or the farm bill, that the Commodity Exchange Act does not override IGRA or tribal-state compacts.

What landed on September 10 is not that ban. It is a fence around the DeFi exemption. Prediction-market contracts that are not spot or cash digital commodity trades do not get the DeFi safe harbor. They also do not, by that sentence alone, get pulled out of the CFTC’s event-contract regime. CFTC Chair Michael Selig has said his agency holds exclusive jurisdiction over those markets and is writing an event-contracts rule. Tribes wanted a wall. They got a narrower door on the DeFi side of a crypto bill.

What the Credit Union Language Now Allows

The third change is easy to skip and expensive for community finance if it sticks. Draft language circulating with the text says a federal credit union may use a digital asset or a distributed ledger to perform, provide, or deliver any activity, function, product, or service it is otherwise allowed by law to perform.

That is an authority clause, not a new product list. If a credit union can already hold deposits, make loans, or move payments, the draft says it may do those jobs on-chain. Custody, settlement and member access would still have to fit the rest of federal credit-union law. Banks have spent a year arguing that crypto platforms should not look like deposit-takers. Credit unions just received a sentence that points the other way.

Lummis also listed support from BlackRock, Fidelity, Franklin Templeton, Goldman Sachs, Charles Schwab and SoFi, plus the National Fraternal Order of Police and the National Organization of Black Law Enforcement Executives. She said the National Sheriffs’ Association and the Majority County Sheriffs of America, whose members she said protect more than 130 million people, recently dropped their opposition.

More Than 114 Democrat Edits Left Ethics Untouched

Eleanor Terrett, who first walked through the new pages on September 10, said the ethics title did not move. Neither did the Blockchain Regulatory Certainty Act language nor the stablecoin yield clauses. People answering Lummis on X did not argue the DINO test. They went back to ethics, and to the 60-vote math.

The ethics fight is about whether senior officials, including the president and their families, can keep issuing, sponsoring, or profiting from digital assets they also oversee. In July, President Donald Trump accepted a bar on public officials, employees and their spouses issuing or sponsoring digital assets, enforced by the Justice Department and set to expire in January 2029. Democrats called that too weak and too short.

Sens. Thom Tillis, a North Carolina Republican, and Ruben Gallego, an Arizona Democrat, sent a tougher draft to the White House before the August recess. That version would let state attorneys general act if the Justice Department sits on its hands, and it would force some divestiture. Gallego has said there has been no White House answer. Tillis has been blunt: if the White House will not bridge the ethics gap, the bill fails.

HOW THE ETHICS FIGHT GOT HERE

1. July 2025: The House passes H.R. 3633, 294-134.
2. May 14, 2026: The Senate Banking Committee advances the bill 15-9, with Gallego and Angela Alsobrooks the only Democrats in the yes column.
3. July 2026: The White House accepts an ethics bar on issuing or sponsoring digital assets, with a January 2029 sunset.
4. Late July 2026: Tillis and Gallego send a stricter ethics draft to the White House, including state attorney general enforcement and some divestiture.
5. August 8, 2026: Senate Majority Leader John Thune files cloture, locking in a September 15 vote.
6. September 10, 2026: Republicans circulate the 630-page text. The ethics title is still the July version.

Lummis can count 114 Democratic fingerprints on other titles. The people who have to furnish the extra votes keep naming the page that did not change.

The Yield Fight the Banks Have Not Dropped

Banks and crypto platforms are still stuck on rewards tied to stablecoin balances. The GENIUS Act already stops payment-stablecoin issuers from paying yield the way a bank pays interest. Exchanges and affiliates have kept activity-based rewards. Community banks say those rewards still pull deposits. Crypto firms say a total ban hands the deposit business to banks. Sens. Tillis and Alsobrooks wrote a committee compromise that bars yield on idle balances and keeps rewards tied to payments, trades, or liquidity. Banking groups want that door closed tighter. The September 10 text does not do it.

A second, newer fight sits on top. Democrats, led on the Agriculture side by Sen. Cory Booker of New Jersey, want regulators to set minimum conflict standards for crypto firms that run an exchange, a brokerage and a trading desk under one roof. They point to FTX’s 2022 collapse, where the exchange and a related trading firm were not walled off. Republicans say they want conflict rules and will not give a future administration a tool that could break those firms up. Booker has said he shares values with Lummis and Senate Agriculture Chair John Boozman and will not back a bill that leaves users exposed. Lee Reiners, a Duke lecturing fellow and former Federal Reserve official, called vertical integration “the whole ballgame.”

WHAT MOVED ON SEPTEMBER 10, AND WHAT DID NOT

The bill’s larger design still splits tokens the way earlier drafts did. Digital commodities would fall to the CFTC, which would hold exclusive jurisdiction over spot markets in digital commodities. Investment-contract assets would stay with the SEC. Permitted payment stablecoins would keep following the GENIUS Act. That map is why DeFi scope and DINO registration matter. They decide who must walk into the CFTC as an intermediary, and who can stay a protocol.

Why Tuesday’s Vote Is Only Cloture

Cloture on September 15 needs 60 votes. It ends debate on whether to take the bill up. It does not pass the Clarity Act, and it does not send anything to the president. Republicans hold 53 seats. Sens. Rand Paul and Josh Hawley are expected to vote no, Hawley over treatment he says favors large fintech firms at the expense of banks. If those two peel off, supporters start from 51 and need nine Democratic yeses. Only Gallego and Alsobrooks crossed over in committee, and both warned that a committee yes was not a floor yes.

THE CLOTURE MATH

• Threshold: 60 votes at 2:15 p.m. ET on September 15, to begin debate, not to enact the bill.
• Republican base: 53 seats, with Paul and Hawley counted as likely nos and Tillis tied to ethics.
• Democratic crossovers so far: Gallego and Alsobrooks in committee; several others have said the draft is short on ethics, consumer protection and illicit finance.
• Market price: A Polymarket contract lists an 18% chance that market-structure legislation becomes law in 2026.

That 18% figure is a year-end enactment contract, harder than a single cloture vote. It still tells you how traders are treating a 630-page draft that does not include the ethics deal. Sen. Mike Rounds, a South Dakota Republican, said talks “do not look good right now.” White House crypto adviser Patrick Witt has told senators to vote yes anyway. Treasury Secretary Scott Bessent has urged the Senate to move the bill. Lummis has warned that if this Congress does not finish, the next real window for market-structure law is 2030.

The DeFi rewrite does not change that arithmetic. A hundred-plus Democratic edits on CFTC registration and credit unions do not spend as nine floor votes. The replies under Lummis’s own announcement made the same point without the press release polish.

Selig Will Write the Rules If Senators Stall

The second-order cost of a failed cloture is not a blank page. It is a regulator who has already said he will fill it. On August 20, at the CFTC’s Innovation Advisory Committee, Selig said he still wants Congress to put a bipartisan bill on the president’s desk. He also gave the backup.

If CLARITY continues to stall because of Democratic obstruction, the CFTC will utilize its existing authorities to begin establishing a regime for crypto asset markets. We owe it to the American people to do so.

Michael S. Selig, CFTC chairman, Innovation Advisory Committee, August 20, 2026

He has told staff to study designating crypto platforms as a form of designated contract market and to talk with on-chain developers about a legal way to offer protocols in the United States. He said the agency would give the Senate room for a vote, then move if a “fair version” does not reach the president. The CFTC already oversees about half of a $1.2 quadrillion notional global derivatives market. Selig’s speech put prediction markets, leveraged crypto and on-chain finance inside that tradition, not outside it.

So the September 10 text does two jobs at once. It tells DINO DeFi shops they will live as CFTC registrants, and it tells tribal governments the DeFi title will not be a back door for sports contracts. It does not buy the Democratic votes that cloture requires. If those votes are not there on September 15, the fence still gets built, only at the CFTC, where Selig has already told staff to begin establishing a regime for crypto asset markets without waiting on a statute.

Disclaimer: This article is news reporting and analysis of pending U.S. legislation and related agency remarks. It is for information only and is not investment, legal, tax or trading advice, and it is not a prediction of how any senator will vote or how any digital asset, stablecoin or prediction-market contract will be treated. Readers who hold crypto, run a protocol, or must comply with securities, commodities or Bank Secrecy Act rules should consult a qualified attorney or licensed financial adviser before making decisions. Vote schedules, draft bill language and market-implied odds can change as the Senate acts and as agencies issue rules.