CLARITY Act Talks Stall Amid Ethics Fights and Law Enforcement Concerns

The bipartisan talks over the CLARITY Act have hit a roadblock due to ethics rules and law enforcement concerns.

A Democratic source described the latest Senate meeting as 'rocky' after Republicans and the White House pulled back from an earlier agreement made before last month's Senate Banking Committee markup.

The deal reportedly included a provision allowing state attorneys general to sue the Department of Justice if officials did not enforce certain crypto ethics rules, but Republicans are pushing back on this version, citing concerns about granting state attorneys general the power to take legal action against federal officials, including members of Congress.

Law enforcement groups have also expressed concerns that some developer protections in the CLARITY Act could make it harder to go after illicit finance. White House officials will meet with law enforcement groups at the White House to address these concerns before the bill can even reach the Senate floor.