US Senator Cynthia Lummis rejected claims that the Digital Asset Market Clarity Act leaves decentralized finance developers exposed to legal risk

Summary

• Lummis said recent Title 3 changes would create the strongest DeFi developer protections in law.
• Jake Chervinsky warned non-custodial software developers could still face money transmitter liability under current language.
• Senate talks continue as lawmakers revise the CLARITY Act before an expected committee markup.

Her response came after crypto lawyer Jake Chervinsky said Title 3 of the latest Senate draft could still place some non-custodial software builders under money transmitter rules.

Lummis said the current criticism does not reflect the latest work on the bill. In a post on X, she wrote, “Don’t believe the FUD,” and said recent bipartisan changes to Title 3 would make the measure “the strongest protection for DeFi and developers ever enacted.”

She also said lawmakers must pass the CLARITY Act for those protections to take effect. Her comments came as Senate negotiations continued over the market structure bill and as the wider crypto industry kept close watch on the next version of the text.

Chervinsky points to Title 3 language

Chervinsky said his main concern is that non-custodial software developers could still be misclassified as money transmitters. He argued that this issue remains unsettled and said that point is “non-negotiable for DeFi.”

The debate centers on how Title 3 interacts with the Blockchain Regulatory Certainty Act. The BRCA, introduced by Lummis and Senator Ron Wyden in January, says developers and infrastructure providers who do not control user funds should not be treated as money transmitters under federal law.

Moreover, the DeFi Education Fund said the January Senate draft included the BRCA in Section 604 and self-custody language in Section 605. At the same time, it said the same draft added a new Title 3 with illicit finance provisions that could still affect DeFi technology and developers.

That concern has grown after recent enforcement actions in the United States. The Justice Department said Tornado Cash co-founder Roman Storm was convicted on August 6, 2025, of conspiracy to operate an unlicensed money transmitting business.

Senate talks continue as bill remains under review

The Senate Banking Committee had planned to mark up digital asset market structure legislation on January 15. Chairman Tim Scott then said on January 14 that the markup would be postponed while bipartisan negotiations continued.

Reuters later reported that the bill still faced disputes in March, with banks opposing stablecoin reward features that could draw deposits away from traditional lenders. That wider fight has kept the CLARITY Act under review as lawmakers work on the next step.