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Congress and federal regulators have spent several years debating how DeFi and other digital-asset activity should be regulated.Now, as the <a rel="noopener noreferrer nofollow">Clarity Act</a> remains pending in the Senate, some industry executives believe lawmakers may be moving toward a middle ground that keeps DeFi alive while formalizing the kinds of safeguards larger platforms already use.In an interview with TheStreet&nbsp;<a rel="noopener noreferrer nofollow">Roundtable</a>, Orest Gavryliak, chief legal officer at 1inch, said that the Clarity Act does exactly that.&nbsp;<a href="https://www.thestreet.com/crypto/policy/cardano-founder-warns-of-15-year-trap-in-crypto-regulation" rel="noopener noreferrer nofollow">Related: Cardano founder warns of 15-year trap in crypto regulation</a><h2 id="the-clarity-act-s-journey-through-congress">The Clarity Act's journey through Congress</h2><blockquote>“The common message that they're sending to us is that actually Clarity Act is very crypto-friendly, DeFi friendly," Gavryliak said.</blockquote>As of April 2, 2026, <a href="https://www.congress.gov/bill/119th-congress/house-bill/3633" rel="noopener noreferrer nofollow">H.R. 3633</a> passed the <a rel="noopener noreferrer nofollow">House</a> on July 17, 2025 and was referred to the <a rel="noopener noreferrer nofollow">Senate</a> Committee on Banking, Housing, and Urban Affairs on Sept. 18, 2025.The bill is closely watched because it would help define how digital assets and crypto market activity are split between regulators.A <a href="https://www.congress.gov/crs-product/IN12583" rel="noopener noreferrer nofollow">Congressional Research Service overview</a> says the measure would exclude certain decentralized-finance activities, such as validating, from some of the bill’s requirements while preserving anti-fraud and anti-manipulation authority.<blockquote>“<a rel="noopener noreferrer nofollow">DeFi</a> will be regulated in a way it operates right now," said Gavryliak. "The same type of features that you have right now, more or less will be in the laws.”</blockquote>That argument is important because DeFi is often still described as a lawless corner of crypto.The Clarity Act is a proposed US bill that aims to define how digital assets and crypto markets are regulated.It would split oversight between agencies like the SEC and CFTC, while excluding some decentralized finance (DeFi) activities from strict requirements.The goal is to provide clearer rules for the crypto industry while still enforcing protections like anti-fraud and market integrity.<h2 id="securing-defi-for-regulatory-compliant-use-cases">Securing DeFi for regulatory compliant use cases</h2>Gavryliak instead pointed to token screenings, token warnings, wallet screenings, transaction simulation, disclaimers, reporting and educational content as evidence that at least some platforms are already building compliance-minded protections into their products.1inch’s own help materials describe scam-protection tools including transaction validation, simulation, warning screens and address screening, supporting the broader claim that user-protection measures are already embedded in some DeFi interfaces.<h3 id="more-news">More news</h3><ul><li><a href="https://www.thestreet.com/crypto/policy/david-sacks-white-house-czar-exist-raises-questions" rel="noopener noreferrer nofollow">White House czar's exit raises questions about undelivered 'promises'</a></li><li><a href="https://www.thestreet.com/crypto/innovation/sofi-taps-solana-to-power-big-business-banking" rel="noopener noreferrer nofollow">SoFi taps Solana to power 'Big Business Banking'</a></li><li><a href="https://www.thestreet.com/crypto/markets/oil-trader-loses-17-million-after-trumps-primetime-iran-speech" rel="noopener noreferrer nofollow">Oil trader loses $17 million after Trump's primetime Iran speech</a></li></ul>None of that means the debate is settled. Anti-money-laundering (<a rel="noopener noreferrer nofollow">AML</a>) rules, customer identification (<a rel="noopener noreferrer nofollow">KYC</a>) and the line between software and financial intermediation remain major open questions.<blockquote>“The KYC feature is something debatable, but it's not in the first (draft)," Gavryliak explained.</blockquote>If the balance holds, the CLARITY Act could end up giving DeFi something the sector has long wanted: a <a rel="noopener noreferrer nofollow">regulatory</a> path that recognizes existing guardrails instead of forcing the industry to start from scratch.

1inch legal chief says Clarity Act is ‘very DeFi-friendly’

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