Clarity Act would apply bank secrecy rules to crypto exchanges
Regulation & Gov ·
The bill under Senate consideration would give FinCEN clearer authority to extend Bank Secrecy Act requirements to crypto exchanges, ATMs, and centralized intermediaries.
Under the draft, exchanges, crypto ATMs, and centralized intermediaries — including those interacting with DeFi — would need to register and run anti-money-laundering programs. That includes know-your-customer and customer due diligence checks, ongoing transaction monitoring, and filing Suspicious Activity Reports. Covered entities would also be required to screen transactions against OFAC sanctions lists.
A central aim of the bill is closing what has been described as the "DINO," or Decentralized In Name Only, loophole. Rather than exempting platforms based on claims of decentralization, the legislation would look at whether an entity exercises actual control over a protocol or service. Pure protocol developers and neutral software providers would remain largely exempt from the new obligations, but platforms found to enable illicit flows would face civil and criminal penalties along with examinations and enforcement action.
Senator Lummis has said the Clarity Act will expand Bank Secrecy Act and sanctions compliance obligations to cover crypto exchanges, DeFi platforms, and ATMs, corroborating the scope described for the bill's AML provisions.
The stated goal behind the framework is twofold: giving authorities stronger tools to track illicit money moving through crypto while offering compliant exchanges and intermediaries clearer regulatory certainty than they currently have.
The bill remains under revision in the Senate, and its final scope — including exactly how "actual control" will be defined for DeFi-adjacent platforms and what thresholds trigger registration — has not been settled. It is not yet clear when a floor vote might occur or how the exemption for protocol developers will be worded in the final text.