A revised version of the CLARITY Act would require United States regulators to determine whether people or groups controlling “non-decentralized finance trading protocols” must comply with securities, commodities and anti-money laundering (AML) requirements.

The revised text, published on Senator Cynthia Lummis’ website, defines a non-decentralized protocol as one whose functionality, operation or rules can be materially altered by a person or coordinated group. The definition also includes protocols whose controllers can restrict users or whose transactions are not governed solely by transparent, pre-established code.

Under the proposal, the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) would create activity-based rules covering registration, conduct, disclosure, recordkeeping and supervision. The Treasury Department would separately determine how existing Bank Secrecy Act obligations apply to the controllers of affected protocols. This approach would direct regulatory obligations toward the people or groups exercising control, rather than requiring the underlying software or distributed ledger system to register on its own.

The bill states that software and distributed ledger systems would not have to register in their own capacity. It also specifies that participation in an incident-response or security council would not, by itself, establish control over a protocol.

The revised text was released ahead of a procedural Senate vote scheduled for Sept. 15. The measure requires 60 votes to advance, meaning Republicans will need support from Democrats. Lawmakers continue to disagree over ethics provisions, anti-money laundering protections and stablecoin rewards. The vote and the negotiations over those provisions are the next steps that will determine whether the proposal advances in its current form.

Crypto industry supports bill as ethics dispute continues

In a statement shared with Cointelegraph, Crypto Council for Innovation CEO Ji Hun Kim called Tuesday’s vote a “pivotal moment” for digital assets, innovation and American leadership. Kim said the United States needs a framework that combines consumer protections with business-conduct standards.

On Thursday, Coinbase CEO Brian Armstrong told CNBC that the CLARITY Act was “ready to get a yes vote.” Armstrong said the “must-have issues” previously raised by Coinbase had been resolved, while negotiations over ethics restrictions remained active and appeared close to a solution. He did not specify which provisions had changed.

However, the ethics section of the newly released text remained largely unchanged from the previous version, even though it has been one of the main points of contention in the negotiations.

On Aug. 20, Democratic Senator Ruben Gallego warned against holding a vote before lawmakers resolved disputes involving ethics and stablecoin yield. “A fast vote gets you a fast result, but I’m not sure it’s the result you want,” Gallego said at the time.

Armstrong said that if the legislation fails to advance, the SEC and CFTC could instead pursue rulemaking and innovation exemptions under their existing authority.