Senator Cynthia Lummis warned that if the CLARITY Act fails to advance in the current legislative session, software developers in the United States will face criminal prosecution simply for publishing code.
Lummis described that scenario as a “regulatory dark age“, a direct critique of the SEC’s approach of regulating through enforcement rather than formal rulemaking, a practice that has defined U.S. crypto policy for the past three years.
If the Clarity Act doesn't pass this Congress, American software developers will be targeted again for prosecution in the near future just for publishing code. These are the stakes.
— Senator Cynthia Lummis (@SenLummis) May 27, 2026
The Senate Banking Committee approved the CLARITY Act last week, but the path to a full floor vote is another matter. The senator warned that this is the last realistic legislative window until at least 2030. The CLARITY Act would establish formal definitions for digital assets, set registration thresholds and divide oversight between the SEC and the CFTC based on each asset’s classification, the same framework that governs traditional finance.
Without that framework, the SEC will continue applying the Howey test on a case-by-case basis, with no binding rules or procedural protections for the sector. Lummis also noted that the absence of regulatory clarity is accelerating capital flight toward jurisdictions such as the United Arab Emirates and Hong Kong, where institutions can operate under defined rules. Enforcement without rulemaking is not a neutral position: it is a tool of control that pushes infrastructure and innovation outside the United States.
Source: https://x.com/SenLummis/status/2059687397277712394
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