CLARITY Act Faces Make Or Break Ethics Battle

The Digital Asset Market Clarity Act remains alive in the Senate, but its path forward depends almost entirely on whether lawmakers can agree on a contentious ethics clause that has stalled negotiations for months.

Sen. Ruben Gallego (@RubenGallego), the leading Democrat on the bill, says he still believes Congress can get the CLARITY Act across the finish line. However, he has been clear that unresolved ethics language is the single biggest obstacle standing between the bill and a Senate floor vote.

Multiple Proposals, No Agreement Yet

Several ethics proposals have been sent to the White House without reaching a deal. The latest comes from Gallego and Republican Sen. Thom Tillis (@ThomTillis), who worked together to draft a bipartisan compromise now under White House review. According to a PunchBowl report, the Tillis-Gallego counteroffer would address concerns from many lawmakers in the first draft by allowing state authorities to enforce a ban on federal officials issuing or sponsoring tokens, rather than the US Attorney General.

The compromise would also require President Trump to divest from crypto-related businesses. Democrats had pushed back hard on earlier drafts. Democrats say they will not accept an ethics provision with the Department of Justice as its sole enforcer, a stance rooted in distrust of the Trump Justice Department to police the president.

September 15 Vote Is the Next Test

Senate Majority Leader John Thune filed the motion to proceed on the bill, opening the multi-step cloture process the chamber uses to push contested legislation past its 60-vote threshold, with a procedural vote scheduled for September 15. The filing came too late to squeeze in a vote before senators left for their August recess, but it queues up an initial procedural vote almost immediately after they return, with the first test set for 2:15 p.m. ET on Tuesday, September 15.

Invoking cloture would limit debate on the motion to proceed. It would not pass the bill or begin debate on the legislation itself. Republicans hold 53 seats, so the motion would need support from at least seven Democrats or independents if every Republican voted for it.

The Clarity Act, if passed into law, would provide a formal legal structure for most cryptocurrency activity in the United States, drawing jurisdictional lines between the SEC and CFTC, and placing much of the industry under the purview of the latter. The delay has weakened expectations around the bill's passing, with analysts warning that the limited legislative calendar and November elections could make passage difficult.

Sources:
The Block: Thune Files Cloture on Clarity Act, Setting Up Sept. 15 Senate Vote
CoinTelegraph: US Senators Sent Revised Ethics Rules to White House for CLARITY Act
Yahoo News: Senate Keeps Clarity Act Alive With Crypto Bill Vote Set for September