Crypto Bill Faces Ethics Standoff as Senate Banking Committee Prepares Vote
Darius Baruo May 11, 2026 21:30
The CLARITY Act moves to Senate Banking markup, but ethics provisions threaten its path forward amid bipartisan debates.
The Digital Asset Market Clarity Act (CLARITY) is set for a critical markup in the U.S. Senate Banking Committee this Thursday, but disputes over ethics provisions could stall its progress. The bill, which passed the House of Representatives in July 2025, seeks to establish clearer rules for cryptocurrencies, stablecoins, and tokenized assets. However, bipartisan disagreements over ethics reforms involving conflicts of interest for elected officials have emerged as a major sticking point.
Senator Kirsten Gillibrand, a Democrat from New York, emphasized the importance of addressing ethical concerns before moving forward. “Americans deserve a well-regulated market with strong consumer protections and real ethics reforms so politicians can’t cash in on their insider status for personal gain,” she told Cointelegraph. Gillibrand and other Democrats have signaled they may withhold support unless the bill includes stronger measures to prevent conflicts of interest, particularly for the President, Vice President, and members of Congress.
Earlier this month, Senators Thom Tillis and Angela Alsobrooks announced a compromise on stablecoin yield provisions, a move that removed one of the obstacles delaying the bill. However, the ethics debate looms large, especially given U.S. President Donald Trump’s extensive and controversial ties to the crypto industry. Trump’s personal fortune reportedly increased by $1.2 billion in 2025, largely due to ventures like his memecoin Official Trump (TRUMP) and his family’s business, World Liberty Financial.
Republican Momentum Meets Ethical Concerns
On the Republican side, Senator Tim Scott, who chairs the Banking Committee, stated that ethics issues fall outside the committee’s scope and should be handled by the Senate Ethics Committee. Wyoming Senator Cynthia Lummis, a vocal supporter of the bill, urged her colleagues to prioritize passing the legislation. Lummis, set to retire in 2027, has been instrumental in advancing crypto regulation in the Senate.
Despite the partisan friction, some remain optimistic. Cody Carbone, CEO of The Digital Chamber, expressed confidence that ethics concerns wouldn’t derail Thursday’s markup. “Ethics has to be tackled on the floor; it’s not within the jurisdiction of the Senate Banking Committee, so I don’t expect it to hold up the markup,” Carbone said.
Even if the CLARITY Act clears the Banking Committee, its journey is far from over. It would need 60 votes to pass the Senate and then return to the House for reconciliation with its previous version. Only after this process could it land on President Trump’s desk. Whether the ethics issue can be resolved without further delay remains the key question as the bill inches forward.
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