CLARITY Act 2026 Passage Odds Fall to 16% as Senate Ethics Fight Deepens

The CLARITY Act’s Polymarket probability of becoming law in 2026 dropped to 16% on Monday amid Senate Democratic resistance to Republicans’ revised ethics terms, with Democratic negotiators also working on a counterproposal.

Traders had pushed the probability to 35% after Republicans circulated revised legislation containing broader ethics provisions. The optimism faded as Democratic negotiators raised objections to the changes, threatening Republicans’ effort to secure the 60 votes needed to advance the measure. 

Senator Mark Warner, one of the Democrats negotiating the legislation, reportedly rejected the revised ethics language as not “near enough.” Politico’s Jasper Goodman later reported, citing three people familiar with the matter, that Democrats began working on their own proposal Monday and subsequently sent it to Republicans.

Tuesday’s procedural vote is the next major test for the legislation. If it fails, it could delay further progress on the bill, which would set the division of US crypto-market oversight between the SEC and CFTC.

Democrats Push Back on Revised Ethics Terms

Punchbowl News’ Brendan Pedersen reported that Senator Raphael Warnock opposed advancing the bill while what Warnock described as opportunities for corruption “in real time” remained unaddressed.

Pedersen said Senator Ruben Gallego also criticized the Republican ethics language as leaving “much to be desired” and intended to develop an alternative proposal.

In a separate report, Pedersen said Senate Banking Committee staff for Senator Elizabeth Warren circulated talking points asserting that a determination by White House ethics officials could override the proposed enforcement mechanism for state attorneys general.

Democratic support is not uniform, however. Politico reported that Senator Kirsten Gillibrand has privately lobbied colleagues to back the procedural vote.

Republican Senator Cynthia Lummis portrayed the GOP concessions as exhausted, saying Trump had accepted two significant ethics provisions and there was “nothing left to give” Democrats.

A coalition of 18 state attorneys general is also opposing the measure, adding another source of resistance.

Tribal and Banking Groups Raise Separate Objections

The Indian Gaming Association urged tribes to lobby senators against the bill. The national tribal gaming group said the decentralized-finance revisions still failed to resolve prediction-market concerns in Indian Country.

It wants the legislation to expressly preserve tribal and state gaming laws, including the Indian Gaming Regulatory Act, against preemption under federal commodities law.

Eight banking trade groups said the revisions still permit stablecoin reward arrangements that effectively resemble interest on deposits. In the groups’ view, community banks could suffer substantial deposit outflows before the proposed regulatory “circuit breaker” was triggered.

Industry Groups Rally Behind CLARITY Act

The crypto sector has taken the opposite position, calling for Senate support.

Blockchain Association CEO Summer Mersinger called on every senator to support the measure, saying Monday that the crypto industry had already made significant concessions to secure bipartisan backing.

Mersinger said passage would strengthen regulatory clarity and consumer safeguards, curb illicit activity, and make it less likely that crypto employment, developers, and innovation migrate abroad.