The Senate Banking Committee advanced the CLARITY Act in a 15-9 bipartisan vote on May 14, marking a significant milestone for crypto regulation. According to latest reports, all 13 Republicans voted yes alongside Democratic Senators Ruben Gallego of Arizona and Angela Alsobrooks of Maryland. However, Alsobrooks warned that her committee support would not guarantee a yes vote on the floor, emphasizing that remaining concerns must be addressed before final passage. The vote was secured at the last moment after Chairman Tim Scott used a procedural maneuver to admit further amendments, bringing two Democrats across the aisle alongside all Republicans. The committee vote follows months of negotiations involving lawmakers, crypto industry participants, and banking trade groups, with earlier efforts derailed when Coinbase CEO Brian Armstrong withdrew support over reward limitations. TD Cowen has raised the odds of the Clarity Act passing to 40% following the committee advance, though analysts note significant political and procedural obstacles remain. Coinbase legal chief Paul Grewal acknowledged that there's work yet to finish the job on Clarity, but noted that Democrats, Republicans, the Administration, and industry are prepared to stay engaged to pass this bill.
The most consequential unresolved issue heading to the Senate floor is an ethics provision barring government officials from crypto dealings, which is missing from the current 309-page draft. As reported by crypto.news, Democrats have pointed to Trump family involvement in World Liberty Financial and the TRUMP memecoin as their primary concern. The Van Hollen amendment, which would have blocked senior government officials from holding crypto business interests, was voted down 11 to 13 in committee. Senator Ruben Gallego has threatened to vote against the bill on the Senate floor if ethics rules are not resolved to restrict the president, vice president and other federal officials and their families from certain crypto-related financial transactions. The White House has rejected language singling out specific officeholders, creating an impasse with Democrats, with Crypto adviser Patrick Witt stating that ethics rules should apply 'across the board, from the president all the way down to the brand new intern on Capitol Hill.' Senator Kirsten Gillibrand has said the bill will not pass the full Senate without conflict of interest language, adding another layer of complexity to the legislative process. TD Cowen's managing director Jaret Seiberg expressed reservations, noting that Democrats will demand a vote on an amendment that would apply conflict of interest standards to President Trump, potentially derailing the Senate floor vote.
The CLARITY Act now faces its next major obstacle in the Senate Agriculture Committee, which must clear the bill before it can advance to the full Senate floor. As reported by crypto.news, this represents a leftover procedural requirement from when the CFTC mostly oversaw farm futures like corn and wheat, since CLARITY hands the CFTC big new powers over crypto. The Agriculture Committee has to sign off too, creating additional procedural complexity with different committee, different faces, and fewer crypto-friendly senators potentially attached to their own amendments. The big one is the full Senate vote, where all 100 senators get a say, but the bill needs 60 votes to break a filibuster, requiring substantial bipartisan support. Republicans hold 53 seats, meaning at least 7 Democrats have to cross over, with Senator Warren having already filed over 40 amendments and the Trump ethics fight still very much alive. If passed into law, this would be the second regulatory framework for crypto firms and other stakeholders in the U.S., after the stablecoin law, the GENIUS Act, with Coinbase's John O'Loghlen noting that such development would prompt others like India to follow suit and turbocharge the sector.
Bitcoin prices surged immediately following the committee announcement, climbing back toward the $82,000 mark, with its market capitalization rising to $1.64 trillion. The 24-hour trading volume jumped 22.29% to $40.31 billion, signaling stronger market activity as the vote unfolded. Coinbase shares rose 8.56% as investors assessed the impact of clearer rules for digital asset platforms, with other crypto-linked equities also rallying. Crypto-linked equities including Galaxy Digital and Strategy also moved higher, while XRP broke through resistance zones, trading near $1.50 before settling slightly lower. However, institutional demand shows signs of caution with spot Bitcoin ETFs recording outflows of $233.29 million on Tuesday, following a mild inflow the previous day, suggesting that continued withdrawals could pressure Bitcoin prices before the bill advances further. At the time of writing, BTC was down 5% and traded below $78K, suggesting profit-taking after Thursday's vote. Nic Puckrin, macro analyst at Coin Bureau, told AMBCrypto that the vote was already priced in, but the West Asia crisis was still a headwind, noting that Bitcoin ran out of steam very quickly after yesterday's little pump on the Clarity Act news.
