With summer in the rearview mirror, the Senate returns next week with crypto’s market structure bill at the top of its agenda.
Senators are expected to vote at 2:15 p.m. ET on Tuesday, September 15, on whether to invoke cloture on the motion to proceed to the Clarity Act, marking the first major test for the industry’s marquee legislation.
Cloture requires 60 votes. With at least two Republicans expected to oppose this initial procedural vote, it will need support from at least nine Democrats, many of whom have tied their support to stronger ethics provisions addressing President Trump’s crypto business interests.
As of this writing, the White House has not responded publicly or privately to a bipartisan ethics counterproposal offered in late July by Sens. Thom Tillis (R-NC) and Ruben Gallego (D-AZ), according to two people familiar with the matter.
The Tillis-Gallego proposal would bar federal elected officials and judges from issuing or sponsoring digital assets and require them to either divest related financial interests or place them in a blind trust. It would also allow state attorneys general to sue the Department of Justice to enforce the ethics provisions, an approach strongly opposed by the White House and some Senate Republicans.
An updated version of the Clarity Act released Thursday by Senate Republicans added new DeFi provisions to the Agriculture Committee’s portion of the bill and gave credit unions new authority to deal in crypto, but made no changes to the White House-approved ethics section rejected by Democrats and some Republicans in July.
The White House’s “radio silence,” as one Democratic staffer described it, comes despite Trump urging Congress to pass the bill during an August event with crypto CEOs. Industry leaders have also been making the case to senior Trump allies, including Commerce Secretary Howard Lutnick, that accepting parts of the ethics deal could put the president in a stronger legal position. In particular, they argue that divesting his crypto interests could reduce his exposure to a wave of subpoenas and investigations into his family’s crypto ventures should Democrats take control of the House in November or win the White House in 2028.
Sens. Elizabeth Warren (D-MA) and Richard Blumenthal (D-CT) wrote to the Securities and Exchange Commission in August demanding an investigation into whether the $TRUMP meme coin facilitated “illegal fraud or unjust enrichment.” The move offers a potential preview of the scrutiny Trump’s crypto ventures could face under a future Democratic administration.
The stalled ethics talks come amid a change in White House counsel. David Warrington, a key player in earlier ethics negotiations, left the administration for the private sector earlier this month. His successor, Will Scharf, is a former federal prosecutor who, like Warrington, previously served on Trump’s personal legal team.
It remains unclear whether the administration will engage with the Tillis-Gallego counteroffer, let alone sign off on it, before Tuesday’s vote.
“I think it’s going to be really difficult for Democrats to vote for this unless they can hang their hat on something with ethics,” Solana Policy Institute President Kristin Smith told Crypto In America. “That continues to be the biggest piece.”
Where there has been progress: After extensive negotiations with Patrick Witt, executive director of the White House Crypto Council, the National Sheriffs’ Association dropped its opposition to the Clarity Act last week and moved to neutral. While not an endorsement, the shift means no major police organization remains publicly opposed to the bill.
It marks a notable change from July, when the NSA called the bill “harmful,” warned of “significant law enforcement and public safety risks” and described the language around the Blockchain Regulatory Certainty Act as “terrible policy.”
“It’s great to see more reasonable takes on market structure legislation,” said Amanda Tuminelli, CEO of the DeFi Education Fund, which advocates on behalf of DeFi and software developers.
Prosecutors’ groups, namely the National Association of Assistant United States Attorneys and National District Attorneys’ Association, remain resistant to the Blockchain Regulatory Certainty Act, a narrow but highly contentious provision in the bill governing when noncustodial software developers can be prosecuted as unlicensed money transmitters. Sen. Catherine Cortez Masto (D-NV), a key Democratic vote who backed a July proposal to narrow those protections, has not publicly shifted her position. Whether further BRCA negotiations can secure her support ahead of Tuesday’s vote remains unclear.
Elsewhere, negotiations over the so-called “Ag title” remain ongoing between Democrats on the Senate Agriculture Committee and a coalition of major crypto exchanges. As Politico reported, a central issue is vertical integration, the practice of housing exchange, brokerage, custody and trading operations under one roof. Negotiators remain divided over what safeguards the bill should require to manage the resulting conflicts of interest and how that model squares with rules for the traditional financial industry.
“We all have slightly different business models, geographic footprints, and there are some valid issues to address,” Kraken Global Head of Policy and Market Structure Jonathan Jachym told Crypto In America. “Even though this is a new asset class, there should be a level playing field.”
Meanwhile, banking groups are renewing pressure for changes to the bill’s stablecoin rewards provisions. In a new letter, the American Bankers Association, Independent Community Bankers of America and more than 60 state and regional banking associations asked Senate leaders to close what they view as “loopholes” allowing rewards that resemble interest. They warned those rewards could pull deposits from community banks and reduce local lending, an argument that has gained traction among some Senate Republicans.
Sen. Jerry Moran (R-KS) said in August that he would oppose the bill without bank-backed changes. Sen. Josh Hawley (R-MO) has raised similar concerns, saying he would oppose the bill as written because of its potential impact on community banks. With the stablecoin language unchanged in the latest text, both could still vote “no” on Tuesday.
Supporters are making their case, too. Treasury Secretary Scott Bessent on Wednesday urged senators to advance the bill and keep negotiating, warning that failure would send a “troubling signal” to allies and adversaries and cost the U.S. new tools to combat crypto-related crime.
Accion Opportunity Fund, a California-based nonprofit lender serving underserved businesses nationwide, called on Senate leaders Thune and Schumer to advance the bill in a letter. The group argued that smaller firms often lack the lawyers and compliance teams needed to navigate conflicting market rules, leaving them at risk of being shut out of the digital asset economy without a clear federal framework.
Of course, Clarity’s path to passage this year does not end in the upper chamber. Even if senators resolve the outstanding issues and pass the bill, the House would still need to approve the Senate’s changes for the bill to become law.
House leaders recently canceled the chamber’s final two voting weeks in September. With both chambers out in October, the decision makes it all but certain that any House action on the Clarity Act will slip into the lame duck session in November, a delay some say could further diminish the bill’s chances.
Rep. Dusty Johnson (R-SD), one of the House bill’s architects, rejected that idea.
“We need to get Clarity passed, and the House scheduling decision doesn’t have any impact on the likelihood of that happening,” Johnson told Crypto In America. “The House was never going to amend the Senate version and send it back over, because there isn’t enough time for that game of ping-pong.”
“We instead need to keep the pressure on the Senate,” he said. “If they pass Clarity in the next few weeks, I’m confident it will become law.”
Hi Eleanor, I really enjoy your coverage and perspective on the crypto industry, especially the way you connect regulation, infrastructure, and the wider evolution of digital assets.
I also write and work in the crypto and Web3 space. At ITIO Innovex, we help crypto and digital-asset companies build scalable infrastructure, including crypto exchanges, wallets, blockchain payment solutions, tokenization, and Web3 infrastructure across networks like Ethereum, BNB, Polygon, and Solana.
I’ve subscribed to your work and would love to connect, support each other’s content, and exchange perspectives. Would you be open to exploring a collaboration down the line if there’s a good fit?
All civilizations fought progress. Elizebeth Warren is a word I cannot use here. I wonder how much money she received from Chase bank and other lobbyists.
She’s as corrupt as she’s trying to paint Trump. Oh, it rhymes with punt.