Seven Democrats led by Gallego and Alsobrooks rejected the CLARITY Act's ethics clause. Polymarket odds on a 2026 enactment sit at 39%. The bill risks slipping to 2027.
Alpha Score of 58 reflects moderate overall profile with strong momentum, poor value, moderate quality, strong sentiment.
Seven Democratic senators issued a joint statement Tuesday opposing the current text of the CLARITY Act, the Senate's crypto market structure bill. The draft falls short on ethics and consumer protection, the senators said.
Sens. Angela Alsobrooks of Maryland, Cory Booker of New Jersey, Catherine Cortez Masto of Nevada, Ruben Gallego of Arizona, John Hickenlooper of Colorado, Mark Warner of Virginia, and Raphael Warnock of Georgia signed the statement.
The dispute centers on an ethics provision that sunsets in 2029 and places enforcement with the Justice Department rather than state attorneys general. Democratic aides said the concerns echoed those raised during the GENIUS Act stablecoin bill negotiations a year ago.
Gallego and Alsobrooks were the only two Democrats who voted to advance the CLARITY Act from the Senate Banking Committee in a 15-9 vote on May 14. Every other Democrat on the panel voted against advancing the bill. Their decision to sign the statement closes the most direct path to 60 votes in a chamber where Republicans hold 53 seats. Senators Chris Murphy, Chris Van Hollen, and Jeff Merkley were already opposed.
President Donald Trump's crypto exposure is at the center of the ethics dispute, the senators said. They pointed to his income from digital assets, which they said the current text does not address. Trump recorded about $1.4 billion of income tied to crypto, $636 million from his memecoin, according to his public disclosures.
Former CFTC Chairman J. Christopher Giancarlo told the Tie Out East Summit on Tuesday that he sees a greater than 50% chance the CLARITY Act does not pass. "That's okay," he said. The sector can advance through regulatory frameworks at the SEC and CFTC regardless of the bill, Giancarlo said. He noted that the CFTC currently has only one commissioner, a structure that would make reversal of crypto policy difficult, he argued.
Sen. Cynthia Lummis, a Wyoming Republican who helped draft the bill, publicly backed the revised ethics language Wednesday. She said the text bans all federal officials including the president from issuing or sponsoring a digital asset for profit. The Democratic critique targets the same provision from the opposite angle. The ethics rule sunsets in 2029. Enforcement sits with the Justice Department rather than state attorneys general. The senators called that design non-durable. Alsobrooks had already called the DOJ-only enforcement version "an unserious offer" in earlier negotiations, according to a person familiar with the talks.
Senate Majority Leader John Thune's office said Wednesday that Thune still plans to move the bill ahead. The August recess is two weeks away. A delay past that point would push the bill into 2027, several Senate aides said, when midterm politics narrow the window for bipartisan deals.
Polymarket's contract on the CLARITY Act being signed into law in 2026 sat at 39% on Wednesday with $2.3 million in cumulative volume. The 39% level is off a February peak above 75% and down from a mid-May reading of roughly 60%. The decline steepened after the Democratic statement Tuesday, traders on the platform said.
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