DeFi & NFT
By Sakamoto Nashi
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Section 604 and the CLARITY Act Fight. Right now, the sharpest legal battleground is Section 604 of the CLARITY Act.
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What a Ruling Could Mean for the Whole Sector. The stakes here go well beyond two people and their legal bills.
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Developers and Regulators Both Waiting. Legal experts tracking the case say the outcome could set a precedent that shapes enforcement…
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Two blockchain developers are heading to trial, and the question at the center of it all is pretty basic: what does it actually mean to transmit money? It sounds simple. It's not.
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The legal fight traces back to a regulatory framework built in the 1970s, long before anyone had heard of Ethereum, smart contracts, or decentralized protocols.
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Right now, the sharpest legal battleground is Section 604 of the CLARITY Act. That section tries to draw clearer lines around digital currencies and the technologies built on top…
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The problem is that "clearer lines" is doing a lot of work there. Critics of the current interpretation say applying 1970s-era money transmission rules to DeFi code is kind of…
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If prosecutors win, developers who write DeFi software could face the same compliance obligations as traditional money services businesses — think anti-money laundering programs,…
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And if the developers win? The crypto industry basically exhales. A ruling that code publishing is protected activity would give blockchain builders significantly more room to…
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See also: Ostiums $18.4M Oracle Breach Exposes a Hidden Weak Spot in Arbitrum DeFi
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The stakes here go well beyond two people and their legal bills. DeFi has grown into one of the most active corners of the crypto ecosystem, with billions locked across lending…
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Compliance costs alone could push development offshore. Smaller teams with no legal budget can't absorb FinCEN registration requirements and ongoing AML audits.
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It's also worth noting that the U.S. isn't the only jurisdiction watching. Regulators in Europe, Singapore, and elsewhere have been wrestling with similar questions about DeFi…
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The broader tension isn't new. Financial regulators have spent years trying to figure out how decades-old legal definitions map onto software that didn't exist when those…
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More context: Coinbase Backs Revised CLARITY Act as 31% Polymarket Odds Expose Trump Ethics Drag
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