Timing is becoming an issue, with the bill still not on the Senate floor schedule, and any delay could push meaningful action into the August recess.
- The CLARITY Act remains stalled over ethics provisions, with the White House reportedly still not responding to a bipartisan compromise proposal from Senators Thom Tillis and Ruben Gallego.
- Coinbase CEO Brian Armstrong urged lawmakers to support the bill, describing it as a bipartisan effort that would bring much-needed clarity to regulating the crypto industry.
- The current fight is about how to enforce the ethics rules, with Democrats looking for a way to allow state attorneys general to challenge DOJ inaction.
The Senate enters a pivotal week for crypto regulation with the CLARITY Act still mired in an ethics dispute that could delay one of the industry’s most anticipated bills until after the August recess. With the measure yet to appear on the Senate floor schedule, lawmakers face a narrowing window to advance legislation that would establish long-awaited rules for digital asset markets.
Why This Week Matters
The White House has not yet replied to a bipartisan compromise proposal that would fix the largest remaining hurdle to the bill, as lawmakers rush to get the Digital Asset Market Clarity (CLARITY) Act through Congress before the August recess, according to journalist Eleanor Terrett.
The proposal in question was introduced by Senators Thom Tillis (R-NC) and Ruben Gallego (D-AZ) last Thursday, said Terrett. Terrett also added that said that a deal on the bill’s biggest outstanding issue had yet to materialize heading into the week of a potential vote.
This comes amid a wider trend of crypto-friendly individuals leaving Washington, including the recent departures of former US Securities and Exchange Commission (SEC) Commissioner Hester Peirce, former Commodity Futures Trading Commission (CFTC) Commissioner Harry Jung, and Senator Cynthia Lummis (R-Wyo) from the policy arena.
Furthermore, Treasury Department’s top digital assets adviser, Tyler Williams, left the government on Friday to return to the private sector under Secretary Scott Bessent.
Coinbase CEO Brian Armstrong Rallies Support
Coinbase (COIN) CEO Brian Armstrong also said on Monday that the bill “represents a ton of bipartisan work” and that “70% of Americans” want clear crypto rules.
“It’s about America getting back to winning, and staying strong as a financial and technology hub,” Armstrong added, noting the bill includes new authorities for banks to integrate stablecoins and crypto. “This week we will find out who in the Senate stands for the will of the people,” he wrote.
COIN stock was up by 0.23% during pre-market trading. On Stocktwits, the retail sentiment around COIN remained in the ‘bullish’ zone, while chatter around it stayed in the ‘high’ levels over the past day.
The Ethics Fight So Far
The standoff traces to late July, when Senate Republicans floated ethics provisions that would prohibit federal officials from issuing or sponsoring digital materials, with enforcement left solely to the Department of Justice (DOJ).
Senator Gallego, one of only two Democrats to vote the bill out of committee, rejected the language as “not a serious effort,” according to Politico. He and Tillis then drafted a counterproposal allowing state attorneys general to challenge DOJ inaction on ethics enforcement, a mechanism modeled on the Laken Riley Act.
On-chain analyst TedPillows pointed out that as of Monday, the bill was still not on the Senate’s floor schedule and that if cloture is filed on Wednesday, the earliest vote would be Friday, which would leave virtually no time before the August 10 recess.
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