CLARITY Act Faces Senate Vote as Final Draft Draws Broad Pushback

CLARITY Act Needs 60 Senate Votes

Republicans cannot advance the legislation alone.

The bill requires 60 votes to clear the procedural hurdle. Republican Sens. Susan Collins and John Cornyn were also described as undecided ahead of the vote.

One calculation said Republicans would need at least seven Democratic votes if their conference remained united.

The final draft incorporates extensive Democratic requests:

• One count identified 126 Democrat-backed revisions.
• Another described more than 100 Democratic changes.
• White House crypto adviser Patrick Witt said Republicans had accepted as much as 95% of Democratic requests.

Sen. Cynthia Lummis, R-Wyo., one of the bill's main negotiators, urged senators to move forward.

“The Clarity Act is right in front of us and this moment won’t come along again for years,” Lummis said. “Let’s take the win and get this done.”

Lummis traced the legislation back to the Responsible Financial Innovation Act she developed with Sen. Kirsten Gillibrand in 2022.

She said support had expanded beyond crypto companies to institutions including Goldman Sachs and Fidelity, as well as the National Fraternal Order of Police and National Sheriffs' Association.

Enactment Prospects Remain Uncertain

Not everyone viewed the final draft as a bipartisan agreement.

TD Cowen's Washington Research Group, led by managing director Jaret Seiberg, put the probability of the bill becoming law in 2026 at 25%.

“This is not a negotiated deal. Democrats are being presented with the final product,” Seiberg said.

Even if the Senate clears cloture, lawmakers could amend the bill before voting on final passage.

Senate approval would then send the legislation back to the House.

The House is not expected to be in session during the final two weeks of September and may not return before the November midterm elections. That could push final action into a post-election lame-duck session.

House Majority Whip Tom Emmer urged lawmakers not to delay.

“We can't afford to lose another year,” Emmer said.

Trump Crypto Ethics Rules Remain a Major Dispute

One of the biggest disagreements concerns President Donald Trump's crypto-related interests.

Trump's crypto-linked wealth was described as reaching hundreds of millions of dollars through interests connected to World Liberty Financial, run by his sons, and the TRUMP memecoin.

An earlier July compromise would have restricted covered officials, employees and their spouses from issuing or sponsoring digital assets.

Democrats objected because enforcement would primarily rest with the Justice Department.

The newest bill expands ethics restrictions and gives state attorneys general a role in enforcement.

Lummis said covered officials could be required to:

• Stop sponsoring certain digital assets
• Divest covered digital-asset holdings
• Place holdings in blind trusts

“If my Democratic colleagues are truly concerned about the president’s crypto investments, then passing this bill — not blocking it — is the way to address that,” Lummis said.

White House Says Trump Approved Ethics Concessions

Witt said White House officials met with Trump before the revised text was released.

According to Witt, Trump agreed to restrictions that could require investments to enter blind trusts and provide states with certain enforcement powers after being told the provisions could not be “weaponized” against him.

Witt called the provisions “historic and unprecedented.”

He said the framework applies beyond the president to the vice president, members of Congress and federal judges.

However, state attorneys general would not receive unrestricted authority to prosecute federal officials.

Witt said their powers would instead involve entities such as crypto exchanges listing prohibited assets and legal action involving the U.S. attorney general.

Democrats Say Ethics Changes Still Fall Short

Democratic staff on the Senate Banking Committee argued that the framework still gives Trump administration officials too much control over enforcement.

They said:

“The bill contains only an empty provision allowing states to sue the Attorney General to try to force him to act.”

They also argued that the Office of Government Ethics could issue an opinion that stops such litigation.

Sen. Elizabeth Warren rejected the compromise as inadequate, while Sens. Ruben Gallego and Angela Alsobrooks had previously said they would not support the legislation without stronger ethics rules.

Sen. Mark Warner also remained dissatisfied.

“There's been some movement. I don't think the ethics provision is near enough,” Warner said.

Democratic negotiators continued developing another proposal after meeting in Senate Democratic Leader Chuck Schumer's office on September 14.

Sen. Raphael Warnock said Republicans would receive a Democratic counteroffer that night.

Witt described the Republican text as the “best and final offer.”

Banks Reject Stablecoin Circuit Breaker

Another major dispute involves stablecoin rewards.

The revised CLARITY Act would give the Treasury secretary authority to impose an 18-month “circuit breaker” if payment stablecoins caused substantial deposit outflows from community banks.

Treasury Secretary Scott Bessent said he would use the power if necessary.

“If stablecoins cause harm to community banks, I will not hesitate to use these tools to ensure they remain fully protected,” Bessent said.

Eight banking trade organizations opposed the proposal on September 14.

The groups included:

• American Bankers Association
• Bank Policy Institute
• Independent Community Bankers of America

They argued the safeguard would take effect only after substantial deposits had already left banks.

The groups also said the bill could allow stablecoin providers to offer rewards that function like deposit interest.

They called for those payments to be restricted before damage occurs rather than relying on emergency intervention afterward.

Witt rejected the banks' argument as an “entirely hypothetical and speculative concern.”

Developer Protections Narrowed

Software developer protections remain another unresolved issue.

The Blockchain Regulatory Certainty Act is designed to protect non-custodial or non-controlling developers from automatically being treated as money transmitters.

The final text narrows registration requirements and creates a civil safe harbor.

However, it removes references to a federal criminal statute that had been included in earlier developer protections.

Coin Center said the framework represented progress but:

“stops short of resolving the essential criminal law issue”

One crypto industry source said the removal of criminal-law protections was “very disappointing.”

Another said the industry disliked the change but “we have to live with it.”

Emmer also raised concerns about losing the criminal-law safe harbor.

Witt defended the remaining developer protections as “robust.”

State Attorneys General Oppose Federal Preemption

State attorneys general raised another challenge.

A bipartisan coalition led by New York Attorney General Letitia James urged senators to reject provisions they said could weaken state securities and anti-fraud enforcement.

James argued:

“As written, the Clarity Act would embolden scammers and potentially strip attorneys general of our authority to protect our states’ investors and their wallets.”

The coalition objected to provisions allowing the SEC to preempt state registration authority.

State officials warned that broad federal preemption could create legal challenges to existing state securities enforcement.

Attorneys general from California, Illinois, Arizona, Kansas, Ohio and Wisconsin were among those identified as signing the letter.

James cited FBI data showing $11.4 billion in crypto-related fraud losses during 2025, up 22% from the previous year.

States had brought more than 330 anti-fraud enforcement actions since 2017.

Lummis Warns Crypto Activity Could Move Overseas

Lummis argued that rejecting the bill would not eliminate the crypto industry.

Instead, she said businesses, capital and jobs could move to jurisdictions such as London, Singapore or Abu Dhabi.

She argued that moving activity offshore could reduce U.S. regulatory oversight and make it harder to prevent another FTX-like failure.

“It is time for Democrats to put their money where their mouth is and join us in passing the Clarity Act… Let’s pass the Clarity Act now,” Lummis said.

Witt made a similar argument, saying federal regulators would continue working even if Congress failed to pass the bill.

“The agencies already have tremendous rulemaking authority,” Witt said.

He added:

“They've got a job to do one way or the other. There's still good news coming for the industry.”