CLARITY Act Faces Hurdle as Senate Democrats Demand Ethics Provision

The CLARITY Act is facing a new hurdle amid a delay in the markup of the crypto bill, with an April markup now all but off the table. Democrats are reportedly demanding the inclusion of an ethics provision in the crypto bill and have gained the support of Senator Thom Tillis, who is a Republican and member of the Senate Banking Committee.

Senate Democrats Push For Ethics Provision In CLARITY Act

According to a Politico report, Senate Democrats are seeking to include an ethics provision in the CLARITY Act that will restrict how executive branch officials use crypto assets, with the goal of cracking down on the Trump family’s crypto businesses. This comes amid concerns about U.S. President Donald Trump’s involvement in crypto.

As CoinGape reported, Senator Richard Blumenthal criticized Trump ahead of the TRUMP coin conference over the weekend, stating that the president had ‘normalized’ his corruption. He claimed that the conference was another in which the president had enriched himself, directly profiting from his office.

Senator Ruben Gallego said there is no final bill without bipartisan agreement on the ethics provision. According to the report, Democrats have also secured support from Senator Thom Tillis, who serves on the Senate Banking Committee.

Tillis said that there has to be ethics language in the CLARITY Act before it leaves the Senate, or he will go from negotiating to advance the crypto bill to voting against it. It is worth noting that the Republican senator is currently one of those leading negotiations between the banking and crypto industries over the stablecoin yield text.

Meanwhile, it is worth noting that the Ethics provision is outside the Senate Banking Committee’s jurisdiction, so the crypto bill’s markup can proceed and the bill can advance out of the committee stage without the ethics provision.

However, Galego said that there needs to be a clear explanation of how the provision will be incorporated into the CLARITY Act before it gets to the floor by the time of the markup. An April markup of the crypto bill is now unlikely, as the Banking Committee has yet to schedule a date, and the Senate heads for recess later this week.

Progress On Negotiations To Include This Provision

Senator Adam Schiff, who is currently leading negotiations for the Senate Democrats along with Gallego, said that they are making progress on negotiations to include the ethics provision in the CLARITY Act. “We have been talking for a long time without making much progress, and now that other parts of the bill are starting to come together, we’re narrowing our differences,” he stated.

The current negotiations are reportedly about how they will enforce this ethics provision. However, Politico noted that it is also unclear whether Democrats will be able to get Senate Republicans and the White House to sign off on a deal to crack down on the Trump family’s crypto business.

White House crypto adviser Patrick Witt, Senators Cynthia Lummis and Bernie Moreno are reportedly spearheading negotiations for the Trump administration. The ethics provision is just one of many hurdles that the CLARITY Act is currently facing.

The banking and crypto industries have yet to reach a deal on the stablecoin yield text, which was one of the reasons Senate Banking Committee Chair Tim Scott suggested they could not mark up the crypto bill just yet. Despite these hurdles, Galaxy Digital CEO Mike Novogratz predicts that the CLARITY Act will pass in June.

However, market participants aren’t very optimistic about the crypto bill passing this year. There is only a 47% chance that President Trump will sign the bill into law this year, according to Polymarket data.