Clarity Act Talks Advance as Senators Clash Over Ethics Enforcement and DeFi Rules

Negotiations over the Clarity Act, a proposal to regulate the U.S. cryptocurrency market, are gaining momentum as lawmakers work through sticking points on ethics standards and decentralized finance (DeFi). Crypto reporter Eleanor Terrett said discussions remain active on Capitol Hill between Republican and Democratic senators, with DeFi provisions on the table but ethics language emerging as the central hurdle. A spokesperson for Senator Cynthia Lummis described last week's White House meeting as constructive, adding that an ethics document expected in the coming days would reflect the latest talks. Democratic Senator Angela Alsobrooks pushed back on a White House approach that would leave enforcement of the bill's ethics provisions to the U.S. Department of Justice. She labeled the idea "frivolous" and said she would not back the legislation if Justice were the only enforcement mechanism. Senator Bernie Moreno said the current proposal would shift sanctioning authority from state attorneys general to the Department of Justice. Alsobrooks said negotiations would continue with the goal of ensuring accountability for all officials. Alsobrooks was one of two Democratic senators who voted in May to advance the Clarity Act through the Senate Banking Committee. She has previously said her support depends on strong ethics provisions being included in the final text. Senate Majority Leader John Thune said there is a "good chance" of reaching an agreement, while cautioning that conditions could change quickly. He said the decisive factor will be whether Democrats can secure enough votes to place the bill on the Senate agenda, and noted negotiations are continuing to line up the needed support. Terrett also reported, citing industry sources, that the White House has reached agreement on an ethics package to be added to the Clarity Act and has circulated drafted language to some Republican senators. This is not investment advice.