{"id":13224,"date":"2026-09-14T18:20:27","date_gmt":"2026-09-14T18:20:27","guid":{"rendered":"https:\/\/cryptonews.uk.com\/?p=13224"},"modified":"2026-09-14T18:20:27","modified_gmt":"2026-09-14T18:20:27","slug":"clarity-act-faces-revolt-hours-before-make-or-break-senate-vote","status":"publish","type":"post","link":"https:\/\/cryptonews.uk.com\/?p=13224","title":{"rendered":"CLARITY Act faces revolt hours before make-or-break Senate vote"},"content":{"rendered":"

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Opposition to the CLARITY Act widened on Sept. 14 as banks, Democrats, state attorneys general and developer advocates rejected key compromises.<\/p>\n

The backlash came hours after Senate Republicans released what they described as their final version of the landmark crypto market-structure bill, incorporating 126 substantive changes Democrats requested and new provisions to resolve disputes over ethics, stablecoin rewards, developers and prediction markets.<\/p>\n

However, those changes have yet to win over several of the bill\u2019s most vocal critics, as banking groups said new protections against deposit flight would act too late, and Democrats challenged the strength of ethics restrictions involving President Donald Trump.<\/p>\n

The disagreements raise the stakes for Tuesday\u2019s cloture vote, which will determine whether the Senate can begin considering the legislation. The motion on H.R. 3633 is scheduled to ripen at 2:15 p.m. Eastern and requires 60 votes.<\/p>\n

Democrats challenge ethics deal as states warn of lost enforcement power<\/h2>\n

Resistance hardened first around the ethics provisions, one of the final issues Republicans had hoped to settle before the vote.<\/p>\n

The latest text requires covered federal officials with substantial crypto-related financial interests to divest those holdings or place them in qualified blind trusts and gives state attorneys general a role in enforcing some restrictions.<\/p>\n

Staff for Sen. Elizabeth Warren, a crypto critic, are circulating arguments that the state enforcement power is weaker than Republicans portray, Punchbowl News reporter Brendan Pedersen reported.<\/p>\n

Warren\u2019s staff contends that the Justice Department retains key enforcement authority and that state action can be blocked where White House ethics officials have cleared the conduct.<\/p>\n

That criticism strikes at a central selling point of the compromise: giving enforcement power outside an administration that could police conflicts involving its own officials.<\/p>\n

Sen. Richard Blumenthal also rejected the revised language, accusing Trump of using crypto to profit from the presidency and describing the legislation\u2019s restrictions as \u201chalf measures.\u201d<\/p>\n

Sen. Chris Van Hollen has also opposed it, saying the legislation still contains loopholes involving Trump\u2019s crypto interests and does too little to combat illicit finance and protect consumers. Van Hollen said he previously offered amendments to address those concerns, but Republicans blocked them.<\/p>\n

Beyond Democrats’ opposition, New York Attorney General Letitia James led a bipartisan coalition of 17 other attorneys general opposing the bill over its impact on state enforcement.<\/p>\n

The coalition warned that CLARITY could weaken state registration and anti-fraud powers while giving the Securities and Exchange Commission (SEC) broader authority to preempt state rules. States have brought more than 330 crypto-related anti-fraud enforcement actions since 2017, James\u2019 office said.<\/p>\n

James added:<\/p>\n

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\u201cMy office has proudly led the fight to protect New Yorkers and all Americans from rampant cryptocurrency fraud. As written, the Clarity Act would embolden scammers and potentially strip attorneys general of our authority to protect our states\u2019 investors and their wallets.\u201d<\/p>\n<\/blockquote>\n

Banks say stablecoin safeguard waits for damage to occur<\/h2>\n

Republicans also failed to end the fight with banks after adding a Treasury \u201ccircuit breaker\u201d intended to address fears that stablecoin rewards could pull deposits from community lenders.<\/p>\n

The final draft empowers the Treasury secretary to intervene if stablecoins cause substantial deposit flight from community banks. Treasury Secretary Scott Bessent backed the provision, saying he would use the new authority if stablecoins begin harming the sector.<\/p>\n

Bessent said:<\/p>\n

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\u201cIf stablecoins cause harm to community banks, I will not hesitate to use these tools to ensure they remain fully protected.\u201d<\/p>\n<\/blockquote>\n

Banking groups argued that the approach lets damage begin before regulators respond.<\/p>\n