Senate Democrats are working on a counterproposal to the CLARITY Act’s ethics provisions after bipartisan negotiations collapsed. Senator Ruben Gallego is collaborating with Senator Thom Tillis and other Republicans on new language. The core dispute centers on how to prevent President Donald Trump from profiting from digital assets, with Democrats opposing rules enforceable only by the Department of Justice. Senate Majority Leader John Thune no longer expects the bill to pass before the August recess, casting doubt on its timeline. Coinbase CEO Brian Armstrong warned that parts of the company’s business could move overseas without clear U.S. crypto legislation.
Senate Democrats are making a fresh push to rewrite the CLARITY Act’s ethics provisions after dismissing a White House-backed proposal from GOP senators. Senator Ruben Gallego criticized the latest Republican draft, calling it “not a serious effort” despite months of bipartisan work.
At the center of the dispute is how to prevent President Donald Trump from profiting from digital assets. Democrats insist they cannot support ethics rules enforceable only by the Department of Justice.
Negotiations involving Gallego, Senators Cynthia Lummis and Bernie Moreno, and the White House collapsed over whether state attorneys general should also have enforcement authority. Gallego stated, “I can’t imagine that that’s a serious effort – after all the work that we’ve done with our Republican colleagues.”
Gallego is now working with Senator Thom Tillis and other unnamed Republicans on a counterproposal, insisting, “We are still in this fight.” Lummis defended the original proposal, while Tillis acknowledged further changes may be necessary to secure 60 votes.
Senate Majority Leader John Thune said he no longer expects the Senate to pass the CLARITY Act before the August recess. Prediction market odds of the bill’s passage have declined amid these disagreements.
Coinbase CEO Brian Armstrong recently warned that parts of the company’s business could move overseas without clear U.S. crypto legislation. A crypto commentator proposed a compromise involving the DOJ as primary enforcer with statutory deadlines and an independent ethics review body.
