A fresh round of disagreement over the CLARITY Act has revealed ongoing concerns originating from the Hyperliquid Policy Center (HPC), as lawmakers prepare for a potential Senate Banking Committee markup.
The debate intensified after a potential deal surfaced earlier in the week, suggesting the bill would broadly bar platforms from offering yield on stablecoins or assets that operate like bank deposits. That provision, along with other unresolved clauses, has prompted a flurry of comments from industry figures and lawmakers.
Hyperliquid Policy Center CEO’s Warning
Jake Chervinsky, CEO of the recently launched Hyperliquid Policy Center, took to social media platform X (previously Twitter) to push back on how the debate has been framed.
While acknowledging that stablecoin yield is a headline-grabbing issue, Chervinsky warned it is not the only sticking point. His primary concern centers on protecting non‐custodial software developers from being mischaracterized as money transmitters.
“That’s non‐negotiable for DeFi,” he wrote, arguing that developers must not be subject to the same regulatory obligations as custodial firms if decentralized finance is to function. He urged fixes to elements of the bill that, in his view, would undermine those protections.
At the heart of Chervinsky’s argument is the Blockchain Regulatory Certainty Act (BRCA), which appears as Section 604 in the last Senate Banking draft.
The BRCA explicitly clarifies that “non‐controlling developers and providers” are not financial institutions required to meet know-your-customer (KYC) obligations under the Bank Secrecy Act.
But Chervinsky says that other portions of the CLARITY Act — specifically parts of Title 3 — still contain language that could subject many non‐custodial developers to KYC duties despite the BRCA’s protections.
“Those sections must be fixed or the bill doesn’t work for DeFi,” he warned. “If the bill doesn’t work for DeFi, it doesn’t work at all.”
Senate Banking Markup Date Remains Unclear
Senator Cynthia Lummis, a leading GOP negotiator on the measure, responded directly to the social media post and sought to reassure stakeholders that bipartisan progress is near.
Lummis told Chervinsky not to “believe the FUD,” stressing that negotiators have spent recent weeks drafting changes to Title 3 designed to make the bill “the strongest protection for DeFi and developers ever enacted.”
The Hyperliquid Policy Center’s CEO answered that both sides largely agree on the need to protect developers and noted that the public draft already contains meaningful safeguards in the BRCA and in Sections 207 and 601. Still, he reiterated his concern about unresolved language in Title 3.
All this unfolds while the timetable for a formal Senate Banking Committee markup remains unclear. The Agriculture Committee has already approved its portion of the legislation in January, but the banking panel has not yet scheduled a markup.
At the time of writing, decentralized exchange Hyperliquid’s native token, HYPE, was trading at roughly $38.5, down 1.6% in the previous 24 hours. Nonetheless, the token has made 33% increases in the monthly time frame, outperforming the largest cryptocurrencies during the same time period.
Featured image from OpenArt, chart from TradingView.com
