Lawmakers criticized the proposal to give the Department of Justice exclusive enforcement authority, arguing that state attorneys general should also be empowered to take action.
A group of Senate Democrats who have generally supported cryptocurrency legislation has rejected the latest version of the CLARITY Act, saying it still fails to adequately address ethics, consumer protection, illicit finance, conflicts of interest, and market integrity.
Their opposition creates another obstacle for the legislation, which already requires bipartisan support to secure the 60 votes needed to pass the Senate.
Democrats Say Changes Do Not Go Far Enough
The revised draft, introduced by Senate Republicans on July 22, includes an ethics package negotiated between the White House and Republican Senators Cynthia Lummis and Bernie Moreno. Under the proposal, the president, vice president, members of Congress, federal judges, certain other public officials, and their spouses would be prohibited from issuing or sponsoring digital assets for compensation while in office. The restriction would remain in effect until January 20, 2029.
The bill would also require covered officials to either sell their cryptocurrency holdings or transfer them into qualified blind trusts. In addition, the Department of Justice would receive civil enforcement authority, including the power to pursue legal action against exchanges that list prohibited tokens.
After reviewing the updated draft, Senators Angela Alsobrooks, Cory Booker, Catherine Cortez Masto, Ruben Gallego, John Hickenlooper, Mark Warner, and Raphael Warnock issued a joint statement arguing that the revised language still does not go far enough.
“The Republican proposed text of the CLARITY Act as it currently stands falls short,” the senators said, adding that stronger safeguards are needed on ethics, consumer protection, illicit finance, conflicts of interest, and market integrity.
The lawmakers said they have worked constructively with their Republican counterparts over the past year and intend to continue negotiations until a final bill is reached.
Speaking publicly, Senator Alsobrooks strongly criticized the proposal to grant the Department of Justice sole enforcement authority, calling the idea “wild and unserious and stone cold crazy” while arguing that state attorneys general should also be able to enforce the law.
Securities lawyer Amanda Fischer also criticized the draft in a social media post, arguing that it does little to address what she described as former President Donald Trump’s existing crypto related conflicts because it does not require immediate divestment and leaves enforcement to officials appointed by Trump.
Support for Blockchain Protections Remains
While several provisions remain under debate, the language of the Blockchain Regulatory Certainty Act has not changed. The measure continues to protect non custodial software developers and blockchain infrastructure providers while preserving the right to self custody digital assets.
The compromise on stablecoin rewards has also been retained. At the same time, lawmakers added new law enforcement measures, including funding for blockchain related investigations, specialized training programs, a cybersecurity center focused on nation state threats, and procedures allowing compliant stablecoin issuers to freeze or reissue tokens when legally required.
Senate Path Remains Uncertain
The CLARITY Act has faced political divisions throughout the legislative process. The House approved its version of the bill by a vote of 294 to 134 in July 2025, while the Senate Banking Committee advanced its own proposal in May with support from two Democratic senators.
Passing the legislation on the Senate floor remains a greater challenge because it requires at least 60 votes. Prediction markets reflected that uncertainty, with the estimated odds of passage falling from more than 70% after the Banking Committee vote to around 31% this week.
Former Commodity Futures Trading Commission Chairman Chris Giancarlo has also expressed skepticism, saying there is a greater than 50% chance the CLARITY Act ultimately fails. Even so, he believes the Securities and Exchange Commission and the Commodity Futures Trading Commission have already developed regulatory frameworks that can continue supporting innovation regardless of whether the bill becomes law.#crypto#cryptonews https://coinsignals.net https://t.me/coinsignalpublic
