CLARITY Act’s DeFi KYC Sparks Clash Amid Shutdown
Lawmakers and industry executives clashed over the CLARITY Act’s DeFi KYC mandate after a leaked Democratic proposal required platforms to obtain licenses and meet KYC/AML rules. Public backlash prompted warnings that protests could delay the market structure bill, targeting enactment by 2026. The dispute coincides with the fourth week of the US government shutdown, stalling crypto market regulation. Supporters, including Rep. Bryan Steil and adviser Kevin Hassett, remain optimistic the CLARITY Act will pass post-shutdown through standard procedures.
Neutral
This clash over the CLARITY Act’s DeFi KYC requirements amid a government shutdown creates regulatory uncertainty that may drive short-term volatility in DeFi tokens. Traders could see price swings as licensing and AML mandates weigh on platform operations. However, with lawmakers and industry leaders still hopeful about passing the market structure bill by 2026, long-term clarity on crypto market regulation is expected. Once shutdown lifts and negotiations resume, clearer rules may stabilize compliance risks, resulting in a neutral impact on cryptocurrency prices.