Senate Democrats Block GOP Crypto Bill Despite Ethics Updates

A group of seven Senate Democrats has officially signaled their opposition to the latest draft of the CLARITY Act. Even with the addition of new ethics rules designed to prevent public officials from issuing digital assets, these lawmakers argue the 616 page proposal remains insufficient. The bill aims to create a federal framework for digital assets by splitting oversight between the SEC and the CFTC.

The opposition from these senators creates a difficult path for the bill, which requires 60 votes to move forward in the Senate. Democrats are pushing for stronger protections regarding illicit finance, market integrity, and consumer safety. Some have criticized the current enforcement mechanisms, suggesting that state attorneys general should have more power to intervene if the Justice Department fails to act.

The banking industry has also expressed concern. Trade groups, including the American Bankers Association, argue that the current text threatens the stability of local lending. They fear the proposed framework could negatively impact the economic activity driven by regional banks.

Senate Majority Leader John Thune is still planning to bring the legislation to the floor next week. With the August recess approaching, the pressure is mounting to see if sponsors can make enough changes to win the necessary Democratic support.