The Senate holds a cloture vote Tuesday afternoon on the revised Digital Asset Market Clarity Act, with the motion needing 60 votes to advance, creating a critical test for the crypto market structure legislation. Bank trade groups, 18 state attorneys general, and Senator Elizabeth Warren all pushed back against the revised Clarity Act hours before the procedural vote. Republicans published the updated text and described it as a final offer to Democrats, with Senator Cynthia Lummis selling the text as carrying over 100 Democrat-requested changes. Republicans need 60 votes to proceed, with Democrats holding 47 seats and no leader announcing enough support to clear the threshold as of September 14. The negotiators met in Schumer's office on Monday evening to send back a counteroffer, with Senator Raphael Warnock saying Republicans would receive the text that night.
The revised CLARITY Act features enhanced ethics provisions that would require covered federal officials to divest certain 'substantial' crypto-related financial interests or place them in a blind trust. According to Politico, Republican sponsors said President Donald Trump accepted provisions based on 'substantially all' of an ethics proposal developed by Sens. Thom Tillis and Ruben Gallego, covering federally elected officials, federal judges and their spouses. The newer draft (EHF26724) toughens the Clarity Act significantly, with new bans on holding a 'significant financial interest' meaning $15,000-plus of equity in any business that drew a plurality of its revenue from issuing or sponsoring tokens in any of the past 3 years, requiring mandatory divestment or a blind trust. Coverage has been extended to presidents-elect, vice presidents-elect, and members-elect before they're sworn in, though children and dependents remain excluded from coverage, a narrower reach than the federal disclosure law. The 2029 sunset is deleted, along with the severability clause, while penalties flip from a 10% cap to a 20% floor, inflation-adjusted, and now apply to the interest itself as well as the transaction. State attorneys general gain standing to sue, with the earlier draft barring them and private plaintiffs by name, and that subsection now gone.
Eight banking associations have focused their opposition on Section 10404, which covers payments and incentives linked to payment stablecoins, arguing that current language could allow crypto companies to offer stablecoin rewards that function like interest on bank deposits. The banking groups wrote to Senate Majority Leader John Thune and Minority Leader Chuck Schumer on September 14, requesting changes to Section 10404 before the Senate considers whether to advance the bill. The banking groups said their deposits fund lending to households, farmers, small businesses, and local communities, warning that stablecoins offering incentives similar to deposit interest could encourage customers to move money out of regulated banks. The associations objected to the word 'solely' in subsection (c)(1)(A), saying the restriction might not cover incentives tied partly to a user's balance. They also requested a 'substantially similar' standard for stablecoin incentives, allowing regulators to examine whether a reward acts like bank interest instead of relying only on the name or structure chosen by its provider. The groups asked Congress to remove 'solely' and revise references to 'a payment stablecoin balance' and 'an interest-bearing bank deposit'. They also want to remove Section 10404(3)(B), which could permit companies to calculate rewards according to stablecoin balance, holding time, or customer tenure.
New York Attorney General Letitia James led a separate coalition of 17 other attorneys general opposing the bill outright, warning that federal preemption would strip state registration regimes and hand the Securities and Exchange Commission unilateral discretion over its scope. Their letter to Senators Tim Scott and Elizabeth Warren warns that the Securities and Exchange Commission could gain the ability to 'preempt state registration authorities,' creating uncertainty over how far states could go when regulating digital assets or pursuing companies accused of violating securities laws. "This unprecedented grant of authority would not only apply to digital assets but would also broadly grant unilateral discretion to SEC to reset the scope of federal preemption, potentially upending the state securities regulatory regime," the New York attorney general's office said. James cited FBI data showing $11.4 billion in crypto fraud losses during 2025, up 22% from the prior year, with states bringing more than 330 anti-fraud actions since 2017. "As written, the Clarity Act would embolden scammers and potentially strip attorneys general of our authority to protect our states' investors and their wallets. Together with my attorney general colleagues, I urge Congress not to pass the Clarity Act," she said.
Senator Elizabeth Warren rejected the ethics provision Republicans added to the text, calling it a 'weak fig leaf' that would do nothing to stop President Trump from making crypto profits. "We got the details of President Trump and Republicans' quote 'final offer' on ethics, and it reads exactly like what you expect the most corrupt President in our history to bless: a weak fig leaf that will do nothing to stop him from making his next $1.4 billion in crypto profits," she stated. Warren raised two objections to the provision: it hands enforcement power to the President's political appointees, who can switch it off, and it carries loopholes that leave his crypto businesses, including World Liberty Financial, untouched. Not every Democrat wrote off the text, with negotiators meeting in Schumer's office on Monday evening to send back a counteroffer, and Senator Raphael Warnock saying Republicans would receive the text that night. The counteroffer was sent back to Republicans, with Senator Cynthia Lummis having sold the text as carrying over 100 Democrat-requested changes.
