NewsBTC
Jan 15, 2026
0 0

Crypto Market Bill Draft Criticized For Continued Developer Prosecution

The draft of the CLARITY Act, aimed at regulating the crypto market, has sparked criticism due to perceived shortcomings in developer protections and increased surveillance for non-custodial software users.

Key Issues in the CLARITY Act Draft

  • The bill initially intended to protect developers but now may allow continued prosecution and enhance user surveillance.
  • Market expert Ryan Adams noted concerns about banks potentially removing stablecoin yield provisions, indicating a preference for bank interests.
  • An independent report by The Rage highlighted insufficient developer protections and lack of safeguards against Bank Secrecy Act implications for self-custodial wallets.
  • The draft suggests potential applications to DeFi that could introduce regulations similar to the Travel Rule, affecting web interfaces and blockchain analysis firms.

The Senate has received 137 amendments to this draft, with discussions continuing.

BRCA Loopholes

  • The Blockchain Regulatory Certainty Act (BRCA) offers some exemptions but still leaves developers accountable if their software is misused.
  • Senator Cynthia Lummis acknowledged the BRCA's AML protections while noting ongoing accountability risks for developers.
  • "Keep Your Coins Act" includes provisions against prohibiting self-custody, yet allows laws concerning illicit finance to apply, leaving room for government intervention.

Privacy and Compliance Concerns

  • The SEC's previous attempts to regulate DeFi as intermediaries are echoed, aiming for BSA and AML compliance guidance.
  • New sections introduce "Distributed Ledger Application Layers," increasing scrutiny and compliance obligations for decentralized finance software applications.
  • The Treasury is tasked with developing oversight mechanisms to manage illicit financing risks, ensuring close monitoring of crypto transactions.

The current draft lacks robust protections for developers and users of privacy-enhancing technologies, increasing their exposure to government oversight and surveillance. This situation poses significant challenges for privacy software users and developers.

Crypto