Senate Democrats blocked the CLARITY Act, a crypto market-structure bill, in a 49-50 procedural vote on Tuesday, despite President 
Donald Trump accepting tougher ethics rules on officials' crypto holdings. Democrats said the latest Republican proposal lacked sufficient enforcement and wanted Trump or any future president required to divest if holdings reach a certain value, PBS NewsHour reported.
What is in the ethics deal? Republicans said late Sunday that Trump had consented to a tougher ethics proposal, with a senior GOP aide putting his acceptance at "about 80%" of a plan from Sens. Thom Tillis and Ruben Gallego. The revised text would require covered officials to divest any "significant" financial interest in a crypto-issuing entity or place it in a qualified blind trust, and would let state attorneys general help enforce the rules. Unlike earlier language, which would have let the restrictions expire when Trump leaves office in January 2029, the new text has no sunset date, Decrypt reported.
What else was in the "final" offer? Republicans called the 635-page text, released Sunday night by Sens. Cynthia Lummis, John Boozman and Tim Scott, their "last, best and final offer," and Lummis said it reflected 126 changes made at Democrats' request. It added a stablecoin "circuit breaker" letting the Treasury secretary intervene if community banks lose deposits to stablecoins on a large scale. It also removed explicit protections for software developers against criminal prosecution under Section 1960, Decrypt reported.
Who else objected? Eighteen state attorneys general led by New York's Letitia James urged senators to reject the bill, saying in a letter Cointelegraph reported that it would make it harder for states to act against crypto companies accused of fraud. Democratic staff on the Senate Banking Committee said the new version left Trump's own appointees, especially the attorney general, too much authority to shut down ethics enforcement, CoinDesk reported.
How did the vote unfold? Democrats sent a counteroffer late Monday that would expand the ethics provision, PBS NewsHour reported, but the two sides could not strike a final deal. Gallego said the latest version "leaves a lot to be desired," while Tillis, a Republican, said before the vote, "We're so close." Among the no votes, CryptoSlate reported, were Democrats who had spent months on the bill, including Kirsten Gillibrand, Mark Warner, Cory Booker and Raphael Warnock. Republicans who worked on the legislation say it could now stall indefinitely, with both chambers out of session in October before the November elections, PBS NewsHour reported.
Figures referenced: Donald Trump. — JudgeMarket.
