US Senate crypto bill hits bipartisan snag over ethics
Crucial Senate Democrats warned that the Republican draft of the Digital Asset Market Clarity Act fails to address ethics and consumer protections, jeopardizing the bill's passage before the August recess and delaying regulatory clarity for crypto markets.
Seven Senate Democrats critical to passing the Digital Asset Market Clarity Act rejected the latest Republican draft on Wednesday, citing inadequate provisions on ethics, consumer protection, and illicit finance. The lawmakers—Angela Alsobrooks, Cory Booker, Catherine Cortez Masto, Ruben Gallego, John Hickenlooper, Mark Warner, and Raphael Warnock—said in a joint statement that the legislation "falls short" of necessary standards. The group forms the core bloc of Democratic negotiators needed to secure the 60 votes required to advance the bill.
For digital asset markets, the statement introduces immediate uncertainty over a measure designed to provide long-sought regulatory clarity. Without the support of these specific senators, the legislation cannot overcome a filibuster. The setback suggests that crypto firms operating in the U.S. will continue to face an ambiguous regulatory environment for the foreseeable future.
The primary sticking point remains an ethics provision tied to elected officials. Senate Republicans, led by Senator Bernie Moreno, published the new draft earlier Wednesday, claiming it featured “the most powerful ethics language in U.S. history.” However, the debate is heavily colored by recent financial disclosures showing President Donald Trump made over $1.4 billion from his crypto ventures in 2025.
The Democratic senators emphasized that provisions addressing "ethics for elected officials, consumer protection, illicit finance, conflicts of interest and market integrity must be strengthened." Notably, Alsobrooks and Gallego were the only Democrats to vote for the Clarity Act in committee, while others on the statement have previously expressed general support for the legislation.
This ethics dispute has now dragged on for over a year, originating during debates on the GENIUS stablecoin bill. Republican Majority Leader John Thune’s office indicated plans to move the bill forward in the coming days. However, with the Senate scheduled to leave for its summer recess after August 7 and other legislative priorities on the calendar, time is running short for a compromise.
"We have been working in good faith with our Republican colleagues for the past year and will continue doing so to get this over the finish line," the Democratic group said. Market participants will now watch closely to see if Republicans can amend the text enough to win over the holdouts before the recess.
