Senate negotiators on the CLARITY Act are facing Democratic demands for ethics language limiting how much senior officials, including the president and vice president, can profit from digital asset ventures. Republicans added restrictions to the July 22 draft, but Democrats say the language is too narrow and weakly enforced. Galaxy has cut its estimate of the bill passing in 2026 from 75% to near 50-50.
Senate negotiators on the CLARITY Act have run into a condition several Democrats treat as essential: ethics language limiting how much senior officials, including the president and vice president, can profit from digital asset ventures. Those demands could decide whether the market structure bill the industry has wanted for years gains the votes it needs to become law.
Democrats call the July 22 ethics language too narrow
Republicans added ethics restrictions to the July 22 CLARITY draft, but Senate Democrats say the language remains too narrow and weakly enforced. A group of Democratic negotiators said the ethics and conflict-of-interest provisions "must be strengthened".
In particular, Senator Elizabeth Warren named the investment exception, affiliated-company structures, and DOJ-only enforcement as loopholes. Senate Democrats want that language settled before they back the bill.
Trump's 2024 promises arrived through the executive branch
The condition traces back to a warning crypto figures made before the 2024 election, when they argued that tying the industry too closely to a political figure could turn market structure legislation into a partisan fight. At Bitcoin 2024 in Nashville, Trump promised to remove SEC Chair Gary Gensler, install crypto-friendly regulators, oppose a central bank digital currency, support domestic Bitcoin mining and build a government-held Bitcoin stockpile.
That bet paid off quickly. Gensler announced his departure as Trump returned to office, and in January 2025 the White House ordered agencies to review crypto rules and protect what it described as fair and open access to banking services. Two months later, Trump created a Strategic Bitcoin Reserve funded with Bitcoin the government had already forfeited.
Galaxy's passage odds slid toward 50-50
CLARITY has already traveled further than most market structure bills. The House passed the Digital Asset Market CLARITY Act 294 to 134 in July 2025, and the Senate Banking Committee advanced it in May 2026.
But the ethics fight is one of several. Negotiators are also split over stablecoin rewards, state enforcement authority, SEC fundraising exemptions, anti-money-laundering rules and investor protections. Galaxy cut its 2026 passage estimate from 75% in May to 60% in June, then to near 50-50 as Senate scheduling tightened further.
Even Democrats who support the bill's broader goals might withhold final votes depending on how negotiations end.
Source: CryptoSlate
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