The crypto industry has endorsed a compromise version of the CLARITY Act, pushing the Senate Banking Committee toward markup. The revised legislation requires firms to restructure staking and yield reward programs from a "buy and hold" model to a "buy and use" framework. This shift aims to redefine how protocols distribute rewards, potentially classifying fewer yield products as unregistered securities.
The Crypto Council for Innovation (CCI) flagged concerns about the bill's broad prohibition language, warning it could inadvertently restrict legitimate DeFi activities beyond its intended scope. Despite this reservation, CCI backed the compromise as progress on regulatory clarity.
The distinction matters. A "buy and use" requirement means users must actively engage with a protocol or service to earn rewards, rather than passively holding tokens. Regulators view this as reducing securities-like characteristics that trigger SEC oversight. The SEC has targeted staking providers like Coinbase and Kraken, arguing their reward programs violate securities laws.
Senate Banking Committee approval would represent a major win for the industry. It signals potential legislative relief from the current enforcement-first approach under Chair Gary Gensler's SEC. However, the bill's final language remains under scrutiny. The CCI's reservation suggests loopholes or unintended consequences still exist in the draft text.