Polymarket odds that the CLARITY Act will become law this year dropped sharply on Monday after a brief increase the previous day. The revised Republican draft, which included broader ethics provisions and targeted non-decentralized DeFi operators, initially lifted the implied probability to 35%, but doubts about the text pushed the odds down to 16%.
Senator Mark Warner, a Democrat participating in the negotiations, reportedly said the ethics changes were not “near enough.” Democratic negotiators began drafting a counterproposal on Monday. The bill requires 60 votes to move forward, and a failed vote on Tuesday could stall a measure that would allocate oversight of US crypto markets between the Securities and Exchange Commission and the Commodity Futures Trading Commission.
According to Punchbowl News, Senator Raphael Warnock said Democrats should not support legislation that does not address corruption opportunities occurring “in real time.” Senator Ruben Gallego said the latest ethics package left “much to be desired” and that he intended to develop a counterproposal. Staff for Senator Elizabeth Warren on the Senate Banking Committee circulated talking points asserting that the proposed state attorney general enforcement mechanism could be overridden by White House ethics officials.
Politico reported, citing three people familiar with the matter, that Democrats had sent their counterproposal to Republican negotiators. Not every Democrat opposes moving the bill toward floor consideration; Senator Kirsten Gillibrand has privately encouraged colleagues to support the procedural motion, Politico reported. Senator Cynthia Lummis said President Donald Trump had accepted two major ethics provisions and that there was “nothing left to give” Democrats.
The resistance compounds opposition from a coalition of 18 state attorneys general and increases uncertainty over whether Republicans can secure the necessary votes. The Indian Gaming Association, representing tribal gaming interests, urged member tribes to ask senators to vote against the bill, saying the proposed decentralized finance provisions did not address Indian Country concerns about prediction markets. It sought explicit language confirming that federal commodities law would not preempt tribal or state gaming laws, including the Indian Gaming Regulatory Act.
Eight banking trade groups said the revised draft did not close loopholes permitting stablecoin rewards that operate like deposit interest. The groups said the proposed regulatory “circuit breaker” would trigger only after substantial deposit outflows from community banks had already occurred.
Crypto industry groups urged senators to advance the bill. Blockchain Association CEO Summer Mersinger said in a Monday statement that the industry had made significant concessions to build bipartisan support and asked every senator to vote yes. She said the legislation would provide clear rules, protect consumers and deter illicit activity while preventing crypto jobs, developers and innovation from moving overseas.
