CLARITY Act Momentum Slows as Lawmakers Clash Over Crypto Ethics Rules

The CLARITY Act's momentum has slowed significantly as lawmakers clash over crypto ethics rules. A bipartisan Senate meeting turned rocky when GOP members and the White House made an 'about-face' on a prior enforcement agreement, according to a Democratic source.

The disputed provision would have allowed state attorneys general to sue the Justice Department for failing to enforce certain crypto ethics requirements. However, Republicans floated a weaker ethics guardrail package during a bipartisan meeting on June 9 and raised concerns about granting state officials the authority to bring actions against federal officials, including members of Congress.

The CLARITY Act passed the Senate Banking Committee on May 14 by a 15-9 vote, but needs at least seven Democrats to cross over if all Republicans vote yes. Democrats Ruben Gallego and Angela Alsobrooks voted in favor, but warned that they would not support the bill if outstanding issues remain unresolved.

The conflict-of-interest question has been on the table since September 2025, when 12 Senate Democrats released a market structure framework demanding ethics provisions. The language was watered down in January 2026 and eventually removed entirely from the May draft.