What’s happening with the CLARITY Act?

The US Senate has pushed consideration of the CLARITY Act to September, narrowing the window for crypto market-structure legislation this year. For DeFi, 1inch Senior Legal Counsel Maylea Ma says an imperfect but protective framework is still preferable to continued regulatory uncertainty.

The CLARITY Act will have to wait. The US Senate did not take up the crypto market-structure bill before its August recess, pushing the next possible action to September. The delay is significant because lawmakers are running out of time before the November midterms, when passing major legislation becomes considerably harder.

For DeFi, the stakes go beyond the timing of one vote. Maylea Ma, Senior Legal Counsel at 1inch, argues that the current bill contains important protections for non-custodial protocols, software developers and self-custody. The question now is whether lawmakers can preserve those provisions and pass the legislation this year.

Why passage this year matters

Maylea says passing the CLARITY Act this year is very important, even if some parts of the legislation remain imperfect.

One point of contention has been ethics provisions. But Maylea notes that those rules are essentially self-contained and do not change how a non-custodial aggregator such as 1inch would be regulated.

The provisions that matter most for DeFi are already in the merged text: protections under the Blockchain Regulatory Certainty Act, safeguards for software developers and self-custody, and exclusions that recognize the difference between non-custodial software and traditional financial intermediaries. Some of these protections were narrowed during earlier amendment rounds, which makes preserving the remaining language in the current text all the more important. 

For Maylea, imperfect ethics language should therefore not be enough to derail the broader framework.

“The alternative to imperfect-but-enacted is not perfect-but-enacted,” she says. “It is no law at all.”

The August recess had been widely viewed as an important deadline because the legislative window becomes much tighter as the midterms approach. With the vote now pushed back, September becomes the next critical opportunity.

Is an imperfect framework better than uncertainty?

For 1inch, Maylea says yes - as long as the DeFi-specific protections remain intact.

A federal law would turn today’s favorable but reversible regulatory guidance into a more durable framework. Agency interpretations can change under a new administration or new regulators. Legislation is harder to reverse.

A law could also reduce reliance on case-by-case enforcement and provide greater consistency across US states.

The qualification is important. “Imperfect” does not mean the industry should support any bill simply to get legislation passed.

Maylea points to Coinbase’s temporary withdrawal of support earlier this year as evidence that the industry can and should push back if legislation becomes affirmatively worse for DeFi than the status quo.

On the current text, however, she believes the DeFi provisions remain protective enough to justify supporting passage.

What happens if the CLARITY Act fails?

If negotiations break down, DeFi would remain dependent on the existing regulatory environment.

That would mean continued reliance on agency interpretations that can be reversed, continued uncertainty around enforcement and continued differences between state-level regulatory regimes.

For 1inch, the practical approach would not suddenly change. The non-custodial model would continue operating under the same conservative legal posture centered on self-custody.

What would remain missing is statutory certainty.

Without legislation, future administrations and regulators could reinterpret how existing financial laws apply to DeFi. Developers would continue operating without the type of explicit legal protections that the current CLARITY Act text aims to provide.

Failure this year could also stall legislative momentum until after the November 2026 midterms. The next Congress may have a different composition and a different appetite for crypto legislation.

September becomes the next test

The CLARITY Act has not failed, but the clock is running.

The Senate delay gives negotiators more time to resolve outstanding disagreements. It also leaves less time to move the bill through the remaining legislative process before election politics take over.

For Maylea, the priority is not a perfect bill at any cost. It is a durable framework that preserves meaningful protections for DeFi developers, non-custodial infrastructure and self-custody. September will show whether Congress can deliver one.

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Disclaimer: This article discusses pending legislation and reflects policy perspectives shared by 1inch Senior Legal Counsel Maylea Ma. It does not constitute legal advice. Statements reflect the status of the legislation as of early August 2026. The CLARITY Act remains subject to change as it moves through the legislative process.