Senate Banking Committee advances crypto market structure bill toward full U.S. Senate vote

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Senate advances crypto market bill

Highlights

Senate Banking Committee advanced the Clarity Act crypto market structure bill by a 15-9 vote, sending it to the full Senate for consideration.
Over 100 amendments, focusing on stablecoin rewards, ethics rules, and DeFi, were filed, with a major dispute over non-custodial developer liability under the Blockchain Regulatory Certainty Act.
Democratic support remains uncertain due to unresolved conflict-of-interest language and demands for strict ethics provisions restricting digital asset activity by top U.S. officials.

Committee vote clears next step for Clarity Act

The Block reported that the Senate Banking Committee on Thursday voted 15-9 to advance its version of the crypto market structure bill, known as the Clarity Act, sending it to the full Senate for consideration.

The committee action follows a prolonged and contentious drafting process. The House passed its own version last year, while the Senate Agriculture Committee advanced a separate bill in January without Democratic support, but the measure then stalled in the Senate Banking Committee after a planned markup was pulled at the last minute when Coinbase withdrew backing over language tied to stablecoin rewards.

Democratic Sen. Ruben Gallego voted in favor of advancing the bill, but said he will oppose it later if conflict-of-interest language is not resolved before a floor vote. TD Cowen's Washington Research Group, led by managing director Jaret Seiberg, said ahead of the markup that committee approval does not guarantee passage in the full Senate, particularly if Democrats decide their requested changes are not included.

Industry pressure is intensifying as the November midterm elections approach. Stand With Crypto, a group that played a visible role in the 2024 elections, is scoring the committee vote and says a future Senate floor vote would be the most important crypto-related vote lawmakers have taken.

Ethics and DeFi disputes shape final negotiations

More than 100 amendments were filed earlier this week, focusing largely on stablecoin rewards, ethics rules and decentralized finance, though not all were considered after Senate Banking Committee Chair Tim Scott said some had been submitted incorrectly. Sen. Jack Reed criticized the process, saying it was not an example of lawmakers working together.

A key dispute centers on the Blockchain Regulatory Certainty Act, which is meant to clarify that non-custodial developers are not money transmitters. Crypto advocates want that language included, while law enforcement groups warn it could hinder efforts to pursue financial crime cases involving decentralized finance.

Lawmakers including Sens. Chuck Grassley and Catherine Cortez Masto reached a compromise earlier this week that adds language saying non-custodial developers can still face criminal charges if they specifically intend to transfer funds for criminal purposes. Cortez Masto later proposed an amendment that would rewrite the provision, arguing the bill in its current form could make it harder for law enforcement to pursue criminals using DeFi, while Sen. Mark Warner withdrew a separate amendment but said issues still need to be resolved.

Democratic concerns also extend to ethics restrictions linked to President Donald Trump and his family's crypto businesses. Some Democrats say they will not support the bill without provisions barring the president, vice president, lawmakers and other federal officials from certain digital asset transactions, and Sen. Chris Van Hollen has filed an amendment that would prohibit top federal officials and their families from owning or promoting digital assets.

Our earlier coverage of the Senate Banking Committee minority staff advisory on the Clarity Act focused on warnings that the bill could leave key illicit-finance vulnerabilities unaddressed. The advisory argued the draft may weaken anti-money-laundering and sanctions enforcement by creating carveouts for certain DeFi activity, leaving open issues tied to mixers and potential stablecoin-enabled sanctions evasion. Those concerns add a national-security layer to the market-structure debate now intensifying as lawmakers negotiate amendments and push the bill toward a floor vote.

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