A new round of wrangling over the CLARITY Act has exposed ongoing concerns emerging from the Hyperliquid Policy Center (HPC), as lawmakers prepare for a possible tokenization of the Senate Banking Committee.
The debate intensified after a potential deal emerged earlier in the week, suggesting that the bill would broadly prevent platforms from offering a return on stablecoins or assets that function like bank deposits. This provision, along with other unresolved provisions, has sparked a flurry of comments from industry figures and lawmakers.
Warning from the CEO of the Excessive Liquid Policy Center
Jake Chervinsky, CEO of the recently launched Hyperliquid Policy Center, took to social media platform X (formerly Twitter) to push back on how the discussion was framed.
While acknowledging that stablecoin returns are a headline-grabbing issue, Chervinsky to caution It’s not the only sticking point. Its primary concern is to protect developers of non-custodial software from being wrongly labeled as money senders.
“This is non-negotiable for DeFi,” he wrote, arguing that developers should not be subject to the same regulatory obligations as custodians if DeFi is to work. He urged reforms to elements of the bill that, in his opinion, would undermine those elements Protection.
At the heart of Chervinsky’s argument is the Blockchain Regulatory Certainty Act (BRCA), which appears in Section 604 in the Senate’s latest banking draft.
The BRCA explicitly states that “non-controlling developers and service providers” are not financial institutions required to meet “know your customer” (KYC) obligations under the Bank Secrecy Act.
But Chervinsky says other parts of the Clarity Act — specifically parts of Title 3 — still contain language that could subject many people. Non-custodial developers KYC duties despite the protection provided by the BRCA.
“These sections must be fixed or the bill will not work with DeFi,” he warned. “If an invoice doesn’t work with DeFi, it doesn’t work at all.”
The history of Senate banking marks remains unclear
Sen. Cynthia Lummis, the GOP’s lead negotiator on the measure, responded directly to the social media post and sought to reassure stakeholders that bipartisan progress is imminent.
In the snow He said Chervinsky should not “believe FUD,” stressing that negotiators have spent recent weeks crafting changes to Title 3 designed to make the bill “the strongest protections for decentralized finance and developers ever.”
The CEO of the Hyperliquid Policy Center responded that both sides largely agree on the need to protect developers and noted that the public draft already contains meaningful safeguards in Barca And in sections 207 and 601. However, he reiterated his concern about unresolved language in Title 3.
All of this is unfolding while the Senate Banking Committee’s tokenization timeline remains unclear. The Agriculture Committee already approved its part of the legislation in January, but the Banking Committee has yet to set a profit margin.
At the time of writing, Hyperliquid’s native token, HYPE, is trading at around $38.5, down 1.6% in the past 24 hours. However, the token has achieved increases of 33% in the monthly time frame, outperforming the largest cryptocurrencies during the same time period.
Featured image from OpenArt, chart from TradingView.com
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