In a move ahead of the scheduled procedural vote on September 15, Senate Democrats have sent a counterproposal regarding the CLARITY Act to their Republican counterparts. This information was reported by CoinDesk, citing a source familiar with the negotiations.
The details of the counterproposal have not yet been made public. Senator Mark Warner was the first to disclose its preparation. According to Bloomberg Law, as of the evening of September 14, party representatives had not reached a decision on whether to support the start of the bill’s consideration.
Negotiations Before the Vote
Republicans have indicated that the final version of the bill includes 126 amendments made at the Democrats' request. These changes include stricter regulations on the cryptocurrency business of officials and expanded powers for state attorneys general to ensure compliance.
However, contention arose regarding the enforcement of these regulations. The bill’s text stipulates that the U.S. Attorney General would be responsible for holding officials accountable. State authorities would not have the authority to independently sue an alleged violator, including the president.
Instead, a state attorney general would be allowed to file a lawsuit in federal court against the head of the U.S. Department of Justice to seek a court order, but only if the alleged violation has caused harm to the state or its residents.
Additionally, a lawsuit would not be permissible if the relevant ethics body deems the disputed activity as allowed. The Government Ethics Office provides such determinations for executive officials. Democrats are concerned that this could enable the administration to block claims from states.
One of the bill's co-authors, Cynthia Lummis, stated that there is no room left for further concessions.
“Democrats want more. They always want more. […] But this is the best we can achieve. Our bucket is empty,” she remarked, as reported by CoinDesk.
Patrick Whitt, White House advisor on cryptocurrency, also labeled the latest version as “the best and final offer.” He noted that the senators' next steps would hinge more on political disagreements than on substantive issues.
Support and Opposition to the Bill
A bipartisan coalition of attorneys general from 18 jurisdictions, led by New York Attorney General Letitia James, has raised additional concerns regarding the bill.
The dispute does not revolve around the states' authority to enforce restrictions on officials. Attorneys general fear that the CLARITY Act might limit their ability to prosecute cryptocurrency firms for violations of securities and commodities laws.
They have demanded that existing registration regimes and the right of state authorities to initiate cases be preserved. Since 2017, regional agencies have taken over 330 actions against participants in the digital asset market.
Additionally, eight banking associations have voiced their opposition to the revised version. The proposed mechanism in the CLARITY Act would allow the Treasury to restrict rewards for stablecoin holdings if it detects a significant outflow of deposits from local banks.
Industry representatives argue that this mechanism would only activate after damage has already occurred. They are advocating for a preemptive ban on payments that effectively replace interest on bank deposits.
The Indian Gaming Association has also called for amendments to the bill, urging the preservation of state and tribal laws on gambling and prohibiting regulated CFTC platforms from offering contracts based on the outcomes of sports and other gambling events.
In contrast, SEC Chair Gary Gensler has expressed support for advancing the CLARITY Act, emphasizing that a failure to pass the bill will not halt the agency's own initiatives.
The SEC will continue to prepare rules for the issuance of digital assets, update transfer agent requirements, and revise cryptocurrency custody regulations. Specifically, the regulator is looking into allowing investment advisors to hold assets independently and recognizing state trust companies as qualified custodians.
Notably, on September 14, President Donald Trump agreed to tighten restrictions on the cryptocurrency business of officials.
Previously, analysts at Bernstein indicated that the latest concessions from Republicans have increased the odds of the CLARITY Act's advancement, although the market has not factored in this positive scenario.