Clarity bill agreement struggles…"Democrats demand stringent DeFi regulation"

As the U.S. Senate Banking Committee pushes to consider a market-structure bill for virtual assets (cryptocurrencies) (the Clarity bill), Democrats are expected to cause last-minute wrangling by demanding strengthened regulation of decentralized finance (DeFi) and other tough conditions.

On the 6th (local time), Alex Son, head of Galaxy Research, posted on his X, "Today both parties met to discuss key demands for the bill's passage," and released the main documents discussed at the meeting.

According to the released details, Democrats are demanding stringent regulation of the DeFi sector. Key demands include ▲mandatory sanctions compliance for DeFi front-ends ▲expanded Treasury Department special measures authority for anti-money laundering ▲establishment of regulations for non-decentralized projects masquerading as DeFi.

They also call for significantly strengthened investor protection measures. Along with reclassification of virtual assets, Democrats demanded ▲new consumer protection provisions for virtual asset ATMs and at the Federal Trade Commission (FTC) ▲addition of provisions to prevent evasion of securities laws.

In particular, the package includes provisions that could burden the industry, such as setting the maximum fundraising cap for virtual asset issuers at $200 million, and requiring contracting parties to pre-report to the U.S. Securities and Exchange Commission (SEC) that the contract is not a security.

Son said, "Republicans are pressuring the Senate Banking Committee to take up the bill next Thursday, January 15," and assessed, "however, many issues remain unresolved, so it is uncertain whether the two parties can reach agreement and pass the bill."