U.S. CLARITY Act passage odds drop as Democrats press for tougher ethics terms

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CLARITY Act passage odds drop

Highlights

Polymarket odds for the CLARITY Act dropping to 16% reflect Democrat criticism that revised Republican ethics provisions remain insufficient ahead of Tuesday's Senate vote.
Democratic counterproposals and opposition from 18 state attorneys general and the Indian Gaming Association increase execution risk and legislative uncertainty for the crypto market oversight bill.
Banking trade groups warn the bill’s DeFi and stablecoin language leaves loopholes and delayed protections, while crypto industry lobbying supports urgent passage to secure regulatory clarity.

Senate negotiations tighten before key vote

As reported by Cointelegraph, citing Punchbowl News and Politico, several key Democrats say the revised Republican proposal still does not go far enough on ethics safeguards, prompting work on a counterproposal.

Polymarket traders had briefly pushed the bill’s chances of becoming law this year up to 35% after Republicans circulated updated language with expanded ethics provisions. That optimism fades on Monday as concerns about the revised text build and the market retraces to as low as 16%.

Senator Mark Warner reportedly says the revised ethics provision is not “near enough,” while Senator Raphael Warnock argues Democrats should not advance legislation that fails to address corruption risks occurring “in real time.” Senator Ruben Gallego also says the latest offer leaves “much to be desired” and plans to work on an alternative.

Politico reports that Democrats have since sent their counterproposal to Republican negotiators, citing three people with knowledge of the matter. Republicans need 60 votes to move the bill forward, and failure on Tuesday could stall legislation designed to define how the U.S. Securities and Exchange Commission and Commodity Futures Trading Commission split oversight of the U.S. crypto market.

Industry groups and state opposition raise execution risk

The legislative push also faces resistance beyond Senate Democrats. A coalition of 18 state attorneys general is already opposed, adding to uncertainty over whether Republican backers can assemble the votes needed for advancement.

The Indian Gaming Association urges member tribes to ask senators to vote against the bill, saying proposed decentralized finance revisions do not resolve Indian Country concerns over prediction markets. The group calls for explicit language stating that federal commodities law does not preempt tribal or state gaming laws, including the Indian Gaming Regulatory Act.

Eight banking trade groups also argue that the latest text leaves loopholes for stablecoin rewards that could function like deposit interest. They say the proposed regulatory circuit breaker would only activate after substantial deposit flight from community banks has already happened.

Support for the bill remains in parts of the crypto sector and among some Democrats. Senator Kirsten Gillibrand reportedly urges colleagues in private to back the procedural motion, while Senator Cynthia Lummis says President Donald Trump has already accepted two significant ethics provisions and that there is “nothing left to give” Democrats. In a Monday statement, Blockchain Association CEO Summer Mersinger says the industry has made significant concessions and argues the measure would create clear rules, protect consumers and keep crypto jobs and innovation in the U.S.

Our earlier coverage on the Clarity Act detailed how the Senate headed into a crucial procedural vote amid escalating Democratic criticism of the bill’s revised ethics language. That update highlighted Sen. Elizabeth Warren’s argument that the changes still leave loopholes around conflicts tied to senior officials, alongside broader pushback related to stablecoin and banking provisions.

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