Senator Cynthia Lummis has publicly rejected a revised proposal to the CLARITY Act, warning it strips critical protections for software developers while failing to equip law enforcement with adequate oversight tools. The dispute centers on removal of the Lummis-Grassley amendment, which clarified that developers face criminal liability only when they specifically intend to facilitate money laundering.
According to journalist Eleanor Terrett, Lummis stated the proposal was not the result of any agreement with her and does not reflect her input. She emphasized that the changes would leave developers exposed to legal risk without improving enforcement capabilities. The push came from prosecutors’ groups, not police organizations, and notably, the National Sheriffs’ Association—which previously opposed the CLARITY Act—did not support the revisions.
The White House and Treasury Department also distanced themselves. Crypto Council Executive Director Patrick Witt said Senator Catherine Cortez Masto’s version was “not even close” to the administration’s stance, while Treasury blamed Washington lobbyists for crafting the language. Separately, the Solana Policy Institute sent a July 28 letter to Senate leaders urging a floor vote before the August recess, arguing the legislation would safeguard innovation and provide regulatory certainty for blockchain-based financial systems.
The clash highlights enduring tensions between fostering crypto development and addressing illicit finance concerns. With talks ongoing, the outcome could shape liability standards and the pace of U.S. software innovation in the digital asset space.
