After key Senate Democrats dismissed Republicans’ “final” crypto bill proposal as inadequate, the chances of the CLARITY Act passing into law this year have dropped from 35% to 16%. The legislation would establish which agency, between the US Securities and Exchange Commission and the Commodity Futures Trading Commission, gets to oversee the US crypto market.
The Polymarket traders welcomed the revised Republican proposal when it came with expanded ethics provisions. Their support quickly waned as doubts grew. The bill now stands before a vote on Tuesday, and its outcome remains uncertain.
What the odds mean
Traders buy and sell shares tied to future events on Polymarket. A 16% chance indicates that most traders believe the bill will fail. The fall followed Democrats pushing back on the revised text.
Some key senators found the revised ethics provision inadequate. Senator Mark Warner, among the Democrats involved in the talks, reportedly said it was not “near enough.” Since then, Democrats have started working on a counterproposal.
The bill requires 60 Republican votes to move forward, and failure on Tuesday could leave it stalled altogether.
Key Democrats push back
Senator Raphael Warnock said Democrats should not advance legislation that fails to address opportunities for corruption that are occurring “in real time,” according to Punchbowl News’ Brendan Pedersen.
Senator Ruben Gallego told Pedersen that the most recent ethics proposal left him without “much to be desired,” and that he was working on a counterproposal. The staff of Senator Elizabeth Warren on the Senate Banking Committee passed around talking points asserting that the proposed state AG enforcement mechanism could be overridden by a decision from White House ethics officials.
Politico’s Jasper Goodman reported that the counterproposal has been forwarded to Republican negotiators, citing three individuals who are familiar with the situation.
Some Democrats are working to move the bill forward, and Senator Kirsten Gillibrand is among them. According to Politico, she has privately pressed her colleagues to back the procedural motion.
Republican Senator Cynthia Lummis said President Donald Trump had accepted two significant ethics provisions and that there was “nothing left to give” Democrats.
The coalition against the bill
Democrats’ pushback joins a coalition of 18 state attorneys general who are also against the measure. This complicates things for Republicans, making it harder to know if they can gather enough support to move the bill forward.
A national group that speaks for tribal gaming interests asked its member tribes to work on senators to oppose the bill. The organization, which represents tribal gaming interests nationally, said the suggested changes to decentralized finance failed to answer Indian Country’s worries about prediction markets.
The group asked for clear wording that federal goods law does not take precedence over tribal or state gambling rules, including the Indian Gaming Regulatory Act.
Banking groups find flaws too
Eight banking trade groups also said the revised text failed to close loopholes allowing stablecoin rewards that function like deposit interest. According to the groups, the proposed regulatory “circuit breaker” would not stop deposit flight before it happened — it would only trigger after substantial funds had already left community banks.
The Blockchain Association’s chief executive, Summer Mersinger, said Monday that her industry had made major compromises to win backing from both sides of the aisle. She called on every senator to back the measure with a yes vote.
Her case rested on the claim that the bill would set out clear rules, safeguard consumers and discourage wrongdoing, all without driving crypto work, developers and fresh ideas abroad.
Who is who in the fight
| Party | Name | Role |
|---|---|---|
| Democrats | Senator Mark Warner | One of the senators negotiating the bill |
| Democrats | Senator Raphael Warnock | Pushes back on ethics provisions |
| Democrats | Senator Ruben Gallego | Says latest ethics offer leaves “much to be desired” |
| Democrats | Senator Elizabeth Warren | Staff circulated talking points |
| Democrats | Senator Kirsten Gillibrand | Privately urges colleagues to support the procedural motion |
| Republicans | Senator Cynthia Lummis | Says Trump has accepted two ethics provisions |
What happens next
Tuesday’s vote will show if Republicans can overcome Democratic resistance. Failure to pass it could leave the bill dead for this session.
Trader confidence is what the odds measure, not any promised result. Every new development has drawn a quick response from traders, and those backing the bill are hoping the drive can be brought back before the vote.
The stakes of the vote
The CLARITY Act aims to resolve which regulator oversees which part of the crypto market. Crypto firms stand to gain from this because certainty matters for them. Otherwise, they confront uncertainty over which rules govern their operations.
Critics take a different view of the legislation. They express concern over the ethics provisions, along with the effect on tribal gaming and banking interests.
What we know so far
The chances have fallen steeply, yet the ballot is not cast for some time. The measure’s destiny depends upon whether the party of the Right can persuade enough members of the other party to join them, thus arriving at 60 votes.
None of the four parties involved found the altered wording acceptable. The rival suggestion remains available for consideration, and the outcome of the vote will determine if anyone alters their position.
The argument for the bill has been made. Now the Senate must decide whether to accept it.
The chances of the CLARITY Act becoming law this year have fallen sharply to 16%, down from the 35% probability traders attached to it when the revised version came out. The outcome of Tuesday’s vote will settle whether the bill moves forward or fails.
Republicans face a narrow road ahead. They need 60 votes to move forward, and the numbers make that road unlikely to travel. The vote on the bill’s fate hangs on Tuesday, and the next few hours will reveal the whole story.
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