BitMart Warning: The U.S. CLARITY Act May Become a "Trojan Horse" — Hundreds of Amendments Could Strangle the DeFi Ecosystem

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BitMart exchange's latest article warns that the *CLARITY Act* currently under review in the Senate has been stuffed with over 100 amendments, potentially becoming a "Trojan horse" that destroys DeFi. The traditional banking industry is intensely lobbying to ban stablecoins from paying interest; furthermore, some senators have proposed revoking protections for non-custodial wallets and smart contract developers, forcing DeFi to bear the same anti-money laundering obligations as traditional finance. Combined with the political wrangling targeting the Trump family, this legislation originally intended to protect innovation could make the U.S. crypto environment extremely unfriendly. (Background: U.S. Clarity Act may be delayed until May! Banking industry dissatisfied with "stablecoin yields," Kelp DAO suffers another $290M hack) (Context: CLARITY Act major breakthrough! U.S. Senate reaches compromise on "stablecoin yields," Coinbase praises: core interests preserved) The "regulatory clarity" that the U.S. crypto industry has been loudly calling for over the years—could it now turn into a nightmare? Renowned cryptocurrency exchange BitMart today (14th) published an article on social media platform X titled *"After 100 Amendments: Why the CLARITY Act Could Be DeFi's Trojan Horse,"* issuing a stern warning about the current legislative chaos in the U.S. Senate. This draft bill, named the *Digital Asset Market Clarity Act of 2025* (CLARITY Act), once received glorious bipartisan support in the House. However, when it entered the Senate Banking Committee for markup review, the harsh political reality surfaced—this 309-page rewrite is currently being thoroughly drowned by over 100 amendments. BitMart's analysis points out that under the wrangling of banking industry lobbying, law enforcement concerns, and partisan politics, these amendments are threatening the very innovation the bill originally sought to protect. This raises a highly controversial soul-searching question: "Is bad regulation really worse than no regulation at all?" Among the amendments, one of the most controversial focal points concerns the handling of "stablecoin yields." The traditional banking industry has launched fierce lobbying efforts attempting to restrict or outright ban crypto platforms from offering interest or yields on payment stablecoins. Traditional banks view these yield-bearing products as an existential threat, fearing they will trigger massive "deposit outflows." Although the latest draft attempts to strike a balance between "prohibiting bank-deposit-like interest" and "permitting staking and liquidity provision," several legislators including Senator Jack Reed have directly proposed amendments that wholesale copy the banking industry's restrictive provisions. BitMart warns this will not only weaken the competitiveness of U.S. domestic crypto enterprises but also force capital to flow toward the "shadow banking" system that regulators least want to see. For decentralized finance (DeFi), the most fatal blow comes from attacks on the *Blockchain Regulatory Certainty Act* (BRCA). The BRCA was originally embedded within the CLARITY Act, aiming to ensure that software developers who do not control user funds (such as builders of non-custodial wallets, smart contracts, and DeFi protocols) would not be treated as "money transmitters" and prosecuted. However, attacks citing illicit finance prevention have followed one after another: - Senator Jack Reed: Proposes complete repeal of BRCA developer protection provisions. - Senator Andy Kim: Demands that enterprises deriving substantial revenue from DeFi platforms must proactively establish anti-money laundering (AML) and sanctions compliance programs. - Senator Elizabeth Warren: Proposes granting the government the power to blacklist crypto platforms that "facilitate more than one illicit transaction." BitMart emphasizes that the core of DeFi is transparent, permissionless code operation, which is fundamentally incompatible with the requirement to "serve as an active gatekeeper for every transaction." If developer immunity is stripped away, the CLARITY Act will completely become a "Trojan horse" imposing unprecedented surveillance on open-source software. Beyond industry competition, the bill has also become entangled in fierce partisan struggles. Democrats led by Senator Warren demand the inclusion of strict conflict-of-interest provisions in the bill, prohibiting the president, senior government officials, and their immediate family members from owning, promoting, or being affiliated with digital asset enterprises. This provision is clearly targeted at the Trump (Donald Trump) family's recent active push for World Liberty Financial (WLF) to obtain a banking license. Democrats threaten that without such ethical guarantees, they will absolutely not let the bill pass. This political deadlock has forced the fate of U.S. market structure to be bound to the political mudslinging over the president's business dealings. According to Polymarket's predictions, the probability of the CLARITY Act passing before year-end currently remains as high as 67% to 75%. However, BitMart cautions that the market seems to see only the "momentum" of the bill's advancement while ignoring the "substantive destruction" its final provisions could bring. BitMart bluntly states at the end of the article that if the price of final legislation is a harsh stablecoin ban and the stripping of developer protections, resulting in the U.S. domestic environment becoming hostile to decentralized innovation, then the crypto industry must ask itself: "Would we rather accept a Trojan horse, or would we rather return to the courts and continue fighting regulatory battles for a while longer?"

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