Clarity Act preliminary vote falls short in Senate amid ethics fight over Trump’s crypto wealth

An initial vote to try to push the Clarity Act closer to becoming law fell flat amid Democratic opposition to President Donald Trump's vast crypto wealth. 

On Tuesday, the U.S. Senate failed to advance the bill without the necessary 60 votes.  Several Democrats who may had been on the fence in passing the bill, including Sens. Kirsten Gillibrand, Catherine Cortez Masto, Angela Alsobrooks, Cory Booker and Mark Warner ultimately voted against it. 

In a statement shortly after the vote, Warner said a bill could not move forward that would allow the president to profit personally from the crypto industry.

"We got close to resolving some of the toughest outstanding issues around law enforcement and national security, but ultimately, the failure to address this fundamental conflict of interest made it impossible for me to support moving forward," Warner said in the statement. "That is why I voted no today."

Sen. Cynthia Lummis, R-Wyo., the bill’s lead architect, had called the moment “now or never" ahead of the cloture vote, in a post on X. 

The measure would create the first comprehensive federal framework for the crypto industry. Over the past year, though, it has been battered by a still-unresolved fight between banks and crypto firms over stablecoins, and by lingering concerns about illicit finance.

Ahead of the vote, Senate Republicans released a revised version of the Clarity Act that included some new language for "non-decentralized finance protocols," but did little to change one area that has been one of Democrats' biggest concerns — ethics. Trump's crypto wealth has grown to hundreds of millions of dollars linked to World Liberty Financial and his TRUMP memecoin.

Republicans, led by Sen. Lummis, later released new text that gives state attorneys general some leeway in enforcing the ethics provisions by allowing them to sue crypto exchanges and the Justice Department, and says that public officials have to divest "significant financial interest" or put those in a blind trust. But Democrats have said that provision is not enforceable given that the Justice Department would decide whether to bring an enforcement action against the president.

On Monday night, Senate Democrats prepared the counteroffer, asking to amend the ethics provision to address Trump's growing crypto profits, specifically by broadening ethics restrictions to address Trump's vast crypto wealth, including his children, and requiring officials with a "very large interest in a crypto company to sell it," not just put it in a blind trust,  according to reporting from Politico. But Lummis later shut down that offer. 

With the failure of Tuesday's vote, it is unclear how the bill moves forward. Time is squeezed ahead of midterm elections in November as lawmakers go on recess and focus turns to campaigning. The Senate could decide to hold another procedural vote if there is enough floor time. 

If the Senate passed the bill, the House would need to vote on it as well, which wouldn't be until after the November elections since they cancelled their last two weeks of September. 

Meanwhile, the Securities and Exchange Commission and the Commodity Futures Trading Commission have begun moving forward with rulemaking, but the Clarity Act is viewed as essential because it gives more permanency to regulatory frameworks. 

On Monday, SEC Chair Paul Atkins said lawmakers should advance the Clarity Act, but said his agency was moving onward. 

"But let me be equally clear: with or without that legislation, this Administration will deliver for American investors and technological innovators—which is immensely important to our markets and to those who participate in them," Atkins said at a Solana Policy Institute event. "Promises were made, and they will be kept."