Clarity Act Talks Collapse Before Senate Vote

Late-Night Talks Fail to Yield Bipartisan Deal

Senate lawmakers failed to secure a last-minute bipartisan compromise on the Digital Asset Market Clarity Act ahead of the May 14 Senate Banking Committee markup, pushing the vote toward a partisan outcome. Senator Cynthia Lummis, who chairs the Senate Banking Subcommittee on Digital Assets, indicated that lawmakers were close, saying the bill's provisions were "almost 99% sorted out." But that final one percent proved decisive.

Democrats including Senators Adam Schiff and Ruben Gallego pushed for stronger ethics language before agreeing to back the legislation. Senate Democrats have remained focused on ensuring the legislation prohibits US government officials and their family members from conflicts involving crypto investments, a priority directed at the business interests of President Donald Trump and his family. A meeting earlier this week on that ethics provision reportedly remained contentious, and Democrats including Senator Kirsten Gillibrand have said the CLARITY Act will not get approved in the Senate without it.

Blockchain Regulatory Certainty Act Becomes a Sticking Point

Journalist Eleanor Terrett reported that disputes tied to the Blockchain Regulatory Certainty Act were a key obstacle to a final agreement. The Senate version of the bill expanded well beyond the House text, growing to nine titles covering decentralized finance protections, illicit finance provisions, bankruptcy safeguards for crypto customers, and the Blockchain Regulatory Certainty Act, which provides safe harbors for software developers. Senator Jack Reed filed an amendment to entirely scrap that section, which shields software developers that do not control people's money from being regulated as money transmitters.

The CLARITY Act passed the House of Representatives on July 17, 2025, by a 294 to 134 bipartisan vote, but has since stalled in the Senate through two cancelled markup sessions, extended negotiations over stablecoin regulation, and an intensifying lobbying fight between the crypto industry and the traditional banking sector. Lawmakers still need to resolve the conflict-of-interest provision before a final Senate vote, where 60 yes votes will be needed. So far, progress through the Senate has depended on Republican party-line voting.

The calendar pressure is severe: if the bill does not clear the Senate Banking Committee before the May 21 Memorial Day recess, the entire process resets, and Senators Lummis and Bernie Moreno have both warned that failure before Memorial Day could push the next viable legislative window to 2030 or beyond. Traders on Polymarket have grown less optimistic on the CLARITY Act's chances throughout the week, with the prediction market now giving the bill a 60% chance of passing this year.

Sources:
CoinDesk: Clarity Act amendments would remake key parts of crypto bill
Fortune: The crypto industry's Clarity Act hits a critical juncture
CoinDesk: Clarity Act unveiled by Senate Banking Committee before hearing