Senate Defeat Halts CLARITY Act Amid Ethics Dispute

The CLARITY Act, the most consequential U.S. crypto market‑structure proposal to date, stalled in the Senate when it fell short of the 60 votes needed to invoke cloture on H.R. 3633. The defeat prevents the bill from reaching the Senate floor and forces its sponsors to decide whether to resume negotiations.

Breakdown of Bipartisan Support

Several Democrats who helped draft the legislation voted against advancing it, including Senators Kirsten Gillibrand, Mark Warner, Cory Booker, Raphael Warnock, Ruben Gallego, Angela Alsobrooks, and Catherine Cortez Masto. Their opposition followed a failed attempt to resolve lingering differences over ethics rules governing crypto interests held by public officials.

Ethics Provisions as the Decisive Issue

Negotiations in Senator Thom Tillis’s Capitol office and later with Senate Banking Committee Chairman Tim Scott’s staff ended without agreement. Republicans released a 635‑page final text that incorporated 126 substantive changes sought by Democrats and included tougher restrictions endorsed by President Donald Trump. Nonetheless, Senators Elissa Slotkin and Bernie Sanders argued the ethics provisions remained insufficient.

• Sen. Elissa Slotkin said the bill’s restrictions on crypto interests held by Trump, his family, and administration officials were “too thin” and called for stronger rules to prevent any future administration from benefiting from crypto ventures.
• Sen. Bernie Sanders linked the legislation to the crypto industry’s political spending, noting that crypto billionaires contributed nearly $300 million to the midterm elections while Trump’s family received over $1.4 billion from crypto‑related ventures.

Implications and Next Steps

The vote’s outcome leaves Republicans with a difficult choice. Reviving the CLARITY Act would likely require reopening the ethics provisions that caused the Democratic defections, despite the extensive compromises already made.

Senator Slotkin emphasized that while she opposed the current version, the bill contains bipartisan elements that could serve as a foundation for future negotiations.