The Senate Banking Committee is set to consider the CLARITY Act on Thursday, but the long-awaited markup of the crypto market structure bill remains stalled by a dispute over ethics provisions that could determine whether it secures the bipartisan support needed to advance.
Democrats hold firm on ethics language
Senator Kirsten Gillibrand told Cointelegraph that negotiations remain constructive, but she made clear that Democrats will not support the bill without a strong ethics component addressing potential conflicts of interest among members of Congress, elected officials, and the President and Vice President. The demand reflects growing scrutiny of President Donald Trump’s personal crypto ventures, including the Official Trump (TRUMP) memecoin and his family’s World Liberty Financial project, which Forbes estimated added roughly $1.2 billion to his net worth as of July 2025.
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“Americans deserve a well-regulated market with strong consumer protections and real ethics reforms so politicians can’t cash in on their insider status for personal gain,” Gillibrand said.
Republican counter: ethics is not the committee’s job
Senator Tim Scott, the Republican chair of the Banking Committee, argued that ethics concerns fall outside the panel’s jurisdiction and should be referred to the Senate Ethics Committee before any floor vote. Senator Thom Tillis, also a Republican, said in April he would not support the bill without a bipartisan agreement on the ethics provision, signaling that the issue cuts across party lines in some respects.
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Cody Carbone, CEO of The Digital Chamber, told Cointelegraph he expects the markup to proceed despite the standoff. “Ethics has to be tackled on the floor, it’s not within the jurisdiction of the Senate Banking Committee, so I don’t expect it to hold up the markup,” he said.
What the CLARITY Act would do
The Digital Asset Market Clarity Act, passed by the House in July 2025, aims to establish a comprehensive regulatory framework for digital assets, clarifying whether cryptocurrencies are securities or commodities and setting rules for stablecoins and tokenized equities. The Senate Agriculture Committee passed its version in January, but the bill must clear both the Banking and Agriculture panels to reconcile securities and commodities law aspects.
Senator Cynthia Lummis, a leading advocate who is retiring in 2027, has urged colleagues to vote yes on Thursday. Prediction markets tracked by Polymarket show mixed sentiment on the bill’s passage odds.
Path to law remains uncertain
Even if the Banking Committee advances the bill, it would need 60 votes to pass the full Senate. The legislation would then likely need to return to the House for a reconciled version before reaching President Trump’s desk. With midterm elections approaching and crypto emerging as a campaign issue, the timeline for final passage remains uncertain.
The standoff over ethics underscores a deeper tension: as digital assets become intertwined with political power, lawmakers are grappling with how to regulate an industry that some of their own colleagues have personally profited from.
Conclusion
The CLARITY Act represents the most significant attempt by Congress to bring regulatory clarity to U.S. crypto markets, but the ethics impasse highlights the difficulty of separating policymaking from personal financial interests. Thursday’s markup will test whether bipartisan cooperation can overcome that divide — or whether the bill stalls until after the 2026 elections.
FAQs
Q1: What is the CLARITY Act?
A: The Digital Asset Market Clarity Act is a bill passed by the House in July 2025 that aims to define whether cryptocurrencies are securities or commodities and establish rules for stablecoins and tokenized equities.
Q2: Why is the ethics provision a sticking point?
A: Democrats want the bill to include rules preventing members of Congress, the President, and the Vice President from profiting from insider knowledge related to crypto. Republicans argue that issue belongs to the Senate Ethics Committee, not the Banking Committee.
Q3: What happens if the bill passes the Banking Committee?
A: It would still need 60 votes in the full Senate and then return to the House for a reconciled version before going to President Trump for signature. The process could take months or longer.
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