Crypto Industry Pushes for Senate Vote on New CLARITY Act Text as Democrats Blast Ethics Plan

Crypto executives and policy groups called on the Senate to move quickly after Senate Republicans released updated text of the Digital Asset Market Clarity Act on July 22, while key Democrats attacked the draft's approach to policing crypto conflicts of interest among government officials, the dispute most likely to determine whether the bill reaches 60 votes before the August recess.

Senate Banking Digital Assets Subcommittee Chair Cynthia Lummis released the updated text, which merges the versions passed by the Banking and Agriculture Committees into a single bill. The full text runs 616 pages, according to Fox Business alum and Crypto in America host Eleanor Terrett, who reported the release followed stakeholder briefing calls earlier in the day.

"This is another step in my years-long journey to ensure the U.S. leads the way on digital assets," Lummis said in the statement. "The coming weeks are likely the last real chance we will have for years to get this right." She added a commitment "to reaching a deal in the coming days that will allow this legislation to become law."

The Clarity Act, which cleared the Senate Banking Committee 15-9 in May, would split digital asset oversight between the SEC and the CFTC. Senate Majority Leader John Thune intends to move to floor action in the coming days before the summer recess, his office told CoinDesk.

Coinbase: "Let's Finish This"

Coinbase CEO Brian Armstrong posted on X that the bill is "ready for a full Senate floor vote."

"The bill represents a true bipartisan compromise with thousands of hours of work on both sides, and it couldn't come at a better time," Armstrong wrote. "There's no federal framework, so bad actors like FTX can harm U.S. customers and much of the industry has gone offshore totally outside U.S. purview."

He said Stand With Crypto members have sent 950,000 messages to members of Congress, and cited polling he said shows 70% of American voters want comprehensive crypto legislation.

Coinbase Chief Policy Officer Faryar Shirzad thanked Senators Tim Scott, Lummis and John Boozman, writing that "while the industry did not get everything it wanted, this bill is an extraordinary achievement and strikes the right balance." In a thread, Shirzad highlighted 1:1 customer asset segregation rules, federal AML standards, and ethics language that he said covers the president and vice president "for the first time ever."

Blockchain Association CEO Summer Mersinger said in a statement the text "reflects years of work and a major step toward clear rules, strong consumer protections, robust ethics provisions, and continued U.S. leadership in digital assets," adding the group is "reviewing the text closely."

DeFi Developer Protections Survive

The DeFi Education Fund, which has pressed for developer protections throughout the negotiations, said the Blockchain Regulatory Certainty Act section is unchanged, meaning non-custodial developers won't be treated as money transmitters. Developer protections under the Exchange Act and Commodity Exchange Act remain, as does the self-custody provision known as the Keep Your Coins Act.

The group counted 25 sections related to sanctions and anti-money laundering, including a new Title IX on law enforcement tools added in response to concerns from law enforcement groups.

"At first glance, this title appears to be smart regulation that will provide law enforcement with appropriate tools without overregulating software developers," the group wrote.

Ethics Section Remains the Flashpoint

According to Terrett, the ethics package was negotiated between the White House and GOP Senators Lummis and Bernie Moreno without Democratic sign-off. It bans the president, vice president, members of Congress, federal judges and their spouses from issuing or sponsoring digital assets for compensation while in office, with a sunset date of Jan. 20, 2029. Covered officials would have to sell crypto holdings or place them in a blind trust, and the Department of Justice would get civil enforcement authority, including the ability to sue exchanges that knowingly list prohibited tokens.

Democrats zeroed in on the DOJ's role. Speaking at a briefing event, Maryland Democrat Angela Alsobrooks called the enforcement proposal "wild and unserious and stone-cold crazy," according to Semafor reporter Eleanor Mueller. "We must empower state-level attorneys general. … It's an absolute that we cannot completely rely on the DOJ given what we've seen," Alsobrooks said.

Texas Republican John Cornyn told Mueller he shares some of law enforcement and banks' concerns over the text and is "diving in … to see if they can be addressed," adding it is "premature" to say whether he would vote against the bill: "We're just getting started."

Moreno pushed back on Democratic criticism, writing that "this ethics provision breaks new ground as the most powerful ethics language in US history," and calling for the bill to get a floor vote.

Clock Running Down

The bill needs at least seven Democratic votes to clear the Senate's 60-vote threshold, a math problem that has hung over the effort for weeks. The Senate leaves for its summer recess in roughly two weeks, and the first week of August is widely viewed as the last window for passage this year, with lawmakers focused on midterm elections after September.