Crypto Groups Back CLARITY as Democrats Reject Ethics Deal
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- CLARITY Act needs 60 Senate votes to pass; Republicans hold a 52-47 majority and released the bill's text this week with ethics provisions barring public officials from issuing or sponsoring cryptocurrencies.
- Senator Ruben Gallego (D) dismissed the Republican ethics language as "not a serious effort," saying it failed to reflect months of bipartisan negotiations.
- Coinbase CEO Brian Armstrong posted on X Wednesday that the bill fixes a missing federal crypto framework, citing FTX's collapse and industry migration offshore as proof the status quo isn't working.
- 1inch chief legal officer Orest Gavryliak told Cointelegraph's Chain Reaction podcast Friday that CLARITY would recognize non-custodial DeFi protocols rather than "regulating with enforcement" via custodial frameworks that "doesn't apply to us at all."
- Prediction market Kalshi priced a 40.3% chance the bill clears the Senate before its August recess; failure to vote by then could push consideration into the weeks before the 2026 midterms.
- Goldman Sachs CEO publicly backed the bill as "not perfect," a break from typical Wall Street caution that Decrypt's coverage also flagged.
Why it matters: The 40.3% Kalshi-implied probability tells you how thin this is: crypto's biggest market structure bill in years hinges on whether ethics language Republicans wrote can survive Democratic demands. For the industry, passage ends years of "regulating with enforcement" risk against non-custodial protocols; for Democrats, the ethics fight is leverage harder to surrender as the 2026 midterms approach.
