CLARITY Act Stalls as Democrats Reject Ethics Deal
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- CLARITY Act needs 60 Senate votes to pass, but Republicans hold only a 52-47 majority, requiring Democratic support that now appears unlikely over the bill's ethics provisions.
- Senator Ruben Gallego dismissed the Republican ethics proposal as "not a serious effort," saying Democrats spent months in negotiations only to receive a response that wasn't "remotely close" to what they sought.
- Coinbase CEO Brian Armstrong posted on X arguing the bill would establish a federal framework preventing harms like FTX while giving law enforcement new tools, calling the status quo broken.
- 1inch chief legal officer Orest Gavryliak said CLARITY would formally recognize non-custodial protocols, criticizing current regulators for forcing DeFi platforms into "custodial frameworks" designed for traditional finance.
- Kalshi prediction market priced the bill's passage before the Senate's August recess at 40.3% as of Friday, with failure potentially pushing consideration into the weeks before the 2026 midterms.
- Goldman Sachs CEO David Solomon publicly backed CLARITY as "not perfect" but vote-worthy, according to a related report cited in the coverage.
Why it matters: With Kalshi pricing passage before August recess at just 40.3% and Gallego publicly torching the ethics compromise, the bill's 60-vote threshold looks increasingly unreachable this cycle — meaning crypto market structure legislation could slip into a pre-midterm window where election politics make bipartisan deals even harder. DeFi platforms like 1inch and major exchanges like Coinbase are counting on CLARITY to end the current "regulating with enforcement" regime.
