Crypto Groups Push for Clarity as 60 Votes Remain Elusive
Major crypto trade associations press Senate leaders to bring Clarity to the floor as bipartisan talks face a major time crunch
What you’ll read: A flurry of Clarity Act news from Capitol Hill, but the bill still lacks the votes to advance. What stakeholders are saying and what comes next. Plus, the Digital Chamber sues Illinois over its new crypto tax and the week’s top stories.
A lot has happened since Monday, when the Clarity Act appeared nowhere near ready for the Senate floor.
The White House agreed to an ethics package, and Senate Republicans released the long-awaited, 616-page updated bill text. Crypto stakeholders largely welcomed it. Senate Democrats did not.
Seven key Democrats whose support could determine whether the bill clears the 60-vote procedural threshold, including Sens. Angela Alsobrooks (D-MD), Mark Warner (D-VA), Catherine Cortez Masto (D-NV) and Ruben Gallego (D-AZ), say they cannot support it in its current form, arguing it falls short in several areas, including ethics and illicit finance. Bipartisan negotiations are set to continue through the weekend as Republicans hope to begin the floor process next week amid a serious time crunch, with just nine legislative days remaining before the August recess.
The industry push: The Digital Chamber, Crypto Council for Innovation and Blockchain Association are ramping up pressure on Senate leadership.
In a new joint letter to Majority Leader John Thune (R-SD) and Minority Leader Chuck Schumer (D-NY), first reported by Crypto In America, the groups’ CEOs praise the updated text for strengthening law enforcement’s ability to combat illicit finance and establishing the first comprehensive federal consumer protection framework for crypto markets.
“These improvements reflect engagement with policymakers across both parties and demonstrate that a well-crafted market structure framework can promote innovation while also bolstering national security,” they wrote.
While the bill currently lacks the votes to advance, the groups argue Senate leaders should begin the floor process as soon as possible, even as bipartisan negotiations continue.
“For the United States to maintain its position as the global leader of financial innovation, there is no substitute for the long-term certainty of durable market structure legislation,” the letter says.
Who’s in, who’s out: Goldman Sachs CEO David Solomon broke with some of his fellow bank CEOs and major banking groups, saying he supports the Clarity Act and wants to see it move forward.
The banking lobby remains one of the loudest critics of the latest text. The American Bankers Association, Bank Policy Institute and Independent Community Bankers of America say it still does not go far enough to prevent stablecoin rewards from draining bank deposits and reducing local lending. The U.S. Hispanic Chamber of Commerce echoed those concerns in a letter this week. Some banking advocates are also flagging changes they say would weaken the application of Bank Secrecy Act and anti-money laundering requirements to certain DeFi platforms.
The DeFi Education Fund, which advocates for DeFi developers and users, praised the updated text for preserving the Blockchain Regulatory Certainty Act and adding new tools for law enforcement to combat crypto crime.
Matthew Hogan, a Connecticut State Police detective who leads the agency’s crypto working group, praised the bill’s new grants, financial sector liaisons and tools for freezing stolen funds. But he said it falls short on returning assets to victims and streamlining how crypto scams are reported.
“Overall, this is an improvement from the previous versions,” Hogan told Crypto In America.
What’s next: Senator Thom Tillis (R-NC) is leading bipartisan talks over ethics after Democrats rejected a White House-backed package that would give enforcement authority to the Justice Department instead of state attorneys general. Tillis called the proposal “a step in the right direction” but has signaled his support hinges on stronger guardrails to prevent government officials from profiting from crypto.
It’s unclear whether Senate leadership can secure the votes needed to begin the floor process next week. Senator Lindsey Graham’s funeral, which many Senate Republicans are expected to attend, could disrupt the schedule early in the week and leave the timing of any cloture vote uncertain.
Digital Chamber Sues to Block Illinois Crypto Tax
The Digital Chamber has become the first trade association to sue over Illinois’ new digital asset tax, filing a lawsuit seeking to block the nation’s first state tax targeting crypto business activity before it takes effect next year.
The complaint argues the law, which slaps a 0.2% tax on certain digital asset business activity, unconstitutionally singles out blockchain-based transactions for different treatment from comparable transactions conducted through traditional financial rails. The group alleges the tax violates the Illinois Constitution’s uniformity and due process protections, the U.S. Constitution’s Commerce Clause and a federal prohibition on discriminatory taxes targeting electronic commerce.
At issue: The tax applies whenever a digital asset is exchanged, transferred or stored, even if no profit is made or the asset never changes hands. It covers Illinois businesses as well as out-of-state firms that generate more than $100,000 from customers in the state.
Critics say the levy, which is expected to generate roughly $60 million in annual revenue, is punitive enough to drive crypto businesses out of Illinois.
“Taxes should be carefully considered, not only for the revenue they produce but for the fairness of those being taxed,” said Digital Chamber CEO Cody Carbone. “That was not the case here, as the provision slipped into legislation the night before the bill’s final consideration.”
The lawsuit asks the court to strike down the tax and block Illinois from enforcing it.
From CFTC Commissioner to Blockchain Association: Summer Mersinger's Year Inside the Room Where It Happens
This week on the podcast, Jacquelyn sat down with Blockchain Association CEO Summer Mersinger at the Injective Summit to reflect on her first year leading the trade group after leaving the CFTC and the view of Washington from the other side of the table.
Mersinger discusses the fight over the Clarity Act, her frustration with the banking industry’s pushback on stablecoin rewards and why she believes developer protections are essential. She also weighs what happens if the bill fails and what’s next for the Blockchain Association in her second year.
Catch the full episode on all platforms here.
Weekly Recap
ICYMI: Here are some of the biggest stories making headlines this week.
Crypto derivatives exchange BitMEX will shut down in September after nearly 12 years in operation, following a strategic review by its parent company.
Strategy launched the Bitcoin Security Consortium alongside partners including BlackRock, Coinbase and Fidelity, with the group committing $15 million over three years to address long-term threats to the network, including risks posed by quantum computing.
SEC Commissioner Hester Peirce warned that crypto vaults and lending strategies may still be subject to federal securities laws depending on how they are structured.
The SEC will pay $150,000 to settle a Coinbase-backed FOIA lawsuit over its loss of former Chair Gary Gensler’s text messages.
The House passed a bill that would restrict members of Congress and their immediate families from trading individual stocks while in office.
Strike CEO Jack Mallers resigned as CEO of Twenty One Capital as plans for a three-way merger involving Twenty One, Strike and Elektron Energy were abandoned.
White House Crypto Council Executive Director Patrick Witt announced his National Guard training has been deferred, allowing him to remain in his role and oversee the Clarity Act’s path through the Senate.
S&P Dow Jones Indices and Pantera Capital launched a new digital asset index focused on tokens and companies with real-world utility and actual revenue, rather than price momentum or popularity.
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The stablecoin-rewards fight buried in here is the real fight, not the ethics language. Banks are lobbying against it because U.S. stablecoin supply is already near $306B and growing — that's real yield competing directly with checking accounts, not a hypothetical. With only nine legislative days left before recess and Senator Graham's funeral eating into the schedule this week, I'd bet this slips past the August deadline regardless of what the trade letter asks for.