Clarity Act stalls as ethics deal collapses, law enforcement objects

The Clarity Act’s path to a Senate floor vote stalled after a closed-door ethics deal collapsed and law enforcement raised objections to Section 604, leaving the bill short of the 60 votes required with 31 Senate session days before the August recess.

Senators met behind closed doors Tuesday to try to revive a tentative bipartisan ethics framework reached in May. Participants included Kirsten Gillibrand, Ruben Gallego, Bernie Moreno, Cynthia Lummis and Patrick Witt, executive director of the White House Crypto Council. During the session Republicans and the White House removed a provision that would have allowed state attorneys general to sue the Department of Justice over failures to enforce ethics rules tied to President Trump. Republicans offered limiting enforcement to the U.S. attorney general and proposed impeachment as an enforcement option; Democrats rejected those alternatives. Several Democrats, including Gallego and Angela Alsobrooks, tied their continued support to adding ethics guardrails addressing the Trump family’s crypto business interests, estimated at $2.3 billion.

A separate dispute centers on Section 604, the Blockchain Regulatory Certainty Act. Law enforcement groups argue parts of the provision could limit their ability to track, investigate and prosecute criminal activity on blockchain networks. Representatives from the National Sheriffs’ Association, the Fraternal Order of Police and the National District Attorneys’ Association met with officials from the Department of Justice, Treasury and FinCEN at a White House Crypto Council-hosted session on Wednesday to press those concerns. Law enforcement officials warned that the drafting of Section 604 could make it harder to pursue criminals operating on blockchain networks.

Senators Mark Warner and Catherine Cortez Masto have conditioned their support on law enforcement sign-off, creating an additional requirement before the bill can reach 60 votes. Negotiators plan to reconvene this week to try to resolve both the ethics and law enforcement disputes.

The legislative calendar allows 31 Senate session days before the August recess. The Clarity Act needs 60 votes to overcome procedural hurdles. Prediction markets now place the bill’s chance of passing in 2026 at roughly 48%, down from about 74% a month ago.

Senators and administration officials are expected to continue talks in the coming days to reconcile the competing demands on ethics enforcement provisions and criminal investigative tools in the bill.