The United States Senate has delayed the CLARITY Act until September, extending regulatory uncertainty for the decentralized finance (DeFi) sector, according to an analysis by 1inch. The bill, formally titled the CLARITY Act, is part of a broader Congressional effort to establish a federal market-structure framework for digital assets, including clearer jurisdictional lines between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Developers of non-custodial protocols and providers of self-custody services remain at the center of the ongoing Senate debate over crypto market-structure legislation.

Maylea Ma, Senior Legal Counsel at 1inch, reviewed the draft market structure legislation in an X post on Tuesday, focusing on provisions that would affect software developers, users of non-custodial applications, and individuals who maintain control over their own funds.

The US Senate has pushed the CLARITY Act to September, and the window for crypto market-structure law this year is narrowing. 1inch Senior Legal Counsel Maylea Ma on why an imperfect but protective framework still beats regulatory uncertainty: — 1inch (@1inch) August 11, 2026

How the CLARITY Act Could Protect DeFi Developers

Ma did not describe the legislation as flawless. She questioned whether an imperfect federal framework could still deliver greater clarity than the status quo — a status quo in which DeFi developers have operated under the threat of SEC enforcement actions without tailored statutory guidance. The current version of the CLARITY Act includes safeguards for non-custodial software developers, she noted.

Ma highlighted provisions tied to the Blockchain Regulatory Certainty Act (BRCA), as well as regulatory carve-outs for software development and self-custody. These provisions distinguish non-custodial applications from financial intermediaries — a distinction that is critical for DeFi services that do not own or control user funds. With non-custodial software, users' code enables direct transactions while assets remain under the user's own control. This legal differentiation could significantly affect the obligations imposed on service providers.

However, Ma pointed out that prior Senate amendment discussions reduced the scope of some of these protections. She emphasized that the final wording will be consequential as negotiations continue. For 1inch, the CLARITY Act must preserve a clear boundary between software developers and financial intermediaries.

The central question is whether non-custodial code should be subject to the same regulatory obligations as companies that custody client assets — an issue that has taken on greater urgency as the SEC has pursued enforcement actions against multiple DeFi-related entities in recent years.

Why the September 15 Cloture Vote Matters

Ma argued that an imperfect bill could still be preferable to the absence of legislation. Defeating the bill would not guarantee a better alternative; the industry could remain governed by administrative interpretations and enforcement decisions rather than a clear statutory framework.

1inch has not endorsed every iteration of the CLARITY Act, however. Ma cited Coinbase's withdrawal of support from the bill, reflecting concerns that certain provisions could be harmful to the DeFi industry.

The next key milestone is the September 15 cloture vote in the Senate. The bill requires 60 votes to advance, making bipartisan support essential. Additional delays remain possible even after a successful cloture vote, and with the legislative calendar compressing as the year progresses, the window for final passage in 2026 continues to narrow.

According to Ma, the outcome is more nuanced than a simple judgment of whether the CLARITY Act is positive or negative for DeFi. The final version, she stressed, should provide genuine protection for non-custodial development and deliver greater regulatory clarity than the current system of agency interpretation and enforcement actions.