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Prediction markets are sending a clear signal that the CLARITY Act’s path to becoming law this year just got a lot rockier. Polymarket odds on the bill passing spiked to 35% on Sunday after Republicans released what they called a final proposal with expanded ethics provisions. By Monday, that optimism had collapsed, with odds sliding as low as 16% as key Senate Democrats made clear they weren’t buying it.
The reversal happened fast. Traders initially read the revised text as a genuine olive branch. But as Democratic senators involved in the negotiations began voicing objections throughout the day, that reading fell apart just as quickly as it had formed.
Democrats Say the Ethics Provisions Still Fall Short
Senator Mark Warner, one of the Democrats at the negotiating table, reportedly said the revised ethics language wasn’t close to sufficient. He wasn’t alone. Senator Raphael Warnock argued that Democrats shouldn’t advance a bill that fails to address corruption opportunities he described as happening in real time. Senator Ruben Gallego called the latest ethics offer lacking and said he intends to work on a counterproposal of his own.
Staff for Senator Elizabeth Warren went further, circulating talking points on the Senate Banking Committee that raised a specific technical concern: the bill’s proposed state attorney general enforcement mechanism could reportedly be overridden by a determination from White House ethics officials — a detail that undercuts one of the accountability measures Republicans had pointed to as a concession.
By Monday, Democrats had formalized their pushback, sending Republican negotiators a counterproposal of their own, according to reporting that cited people familiar with the matter. Not every Democrat is dug in against the bill, though — Senator Kirsten Gillibrand has reportedly been privately encouraging colleagues to support the procedural motion to advance it.
Republicans, for their part, are signaling they’ve given as much as they’re willing to. Senator Cynthia Lummis said President Trump had already agreed to two major ethics provisions and that there was nothing left to offer Democrats.
Outside Groups Pile On With Their Own Objections
The bill’s problems aren’t limited to the Senate floor. The Indian Gaming Association is urging tribes to lobby their senators for a no vote, arguing the bill’s decentralized finance provisions don’t address Indian Country’s concerns about prediction markets. The group wants explicit language confirming that federal commodities law doesn’t override tribal or state gaming laws, including the Indian Gaming Regulatory Act.
Banking trade groups have their own complaint. Eight organizations said the revised text still leaves a loophole letting stablecoin rewards function like deposit interest, arguing that the bill’s proposed safeguard would only kick in after community banks had already lost significant deposits.
Crypto industry groups, meanwhile, are pushing in the opposite direction. The Blockchain Association’s CEO said the industry has made real concessions to build bipartisan support and is urging every senator to back the bill, framing it as a way to keep crypto jobs and innovation from moving overseas.
Also Read: Ripple’s 1 Billion XRP Unlock Meets a Critical CLARITY Act Deadline: What Happens Next?
What’s Next
With a coalition of 18 state attorneys general already opposed and now visible cracks among Senate Democrats, Republicans face a genuinely uncertain path to the 60 votes they need. Tuesday’s vote will determine whether the bill advances at all — and with it, whether Congress settles how the SEC and CFTC divide oversight of the US crypto market, or whether that question stays unresolved heading into the rest of the year.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
