Polymarket odds that the CLARITY Act will become law this year fell sharply again on Monday, reversing a jump from the previous day. Traders had briefly pushed the odds up to 35% after Republicans released a revised proposal with broader ethics provisions, but that optimism faded as concerns over the new text grew, sending the odds down to as low as 16%.
One of the Democrats involved in the talks, Senator Mark Warner, reportedly said the revised ethics provision was not "near enough." Democrats taking part in the negotiations began preparing a counterproposal on Monday.
Republicans need 60 votes to advance the bill. If the effort fails on Tuesday, the legislation could stall. The measure would set the framework for how the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) divide oversight of the US crypto market.
Democratic negotiators say the ethics language still falls short
Brendan Pedersen of Punchbowl News reported that Senator Raphael Warnock said Democrats should not move forward with legislation that fails to address opportunities for corruption occurring "in real time."
Pedersen also reported that Senator Ruben Gallego said the latest ethics offer left "much to be desired" and that he planned to work on a counterproposal. In a separate report, Pedersen said staff for Senator Elizabeth Warren on the Senate Banking Committee circulated talking points arguing that the proposed enforcement mechanism for state attorneys general could be overridden by a determination from White House ethics officials.
Democrats have since sent their counterproposal to Republican negotiators, according to Politico reporter Jasper Goodman, who cited three people with knowledge of the matter.
Not every Democrat is opposed to moving the bill toward floor consideration. Politico reported that Senator Kirsten Gillibrand has privately urged colleagues to support the procedural motion.
Republican Senator Cynthia Lummis said President Donald Trump had accepted two major ethics provisions and that there was "nothing left to give" Democrats.
The bill is also facing resistance from a coalition of 18 state attorneys general, adding more uncertainty over whether Republicans can gather the votes needed to move it ahead.
Banking and tribal groups object to the revised draft
The Indian Gaming Association, a national group representing tribal gaming interests, urged member tribes to press senators to vote against the bill. The group said the proposed changes involving decentralized finance, or DeFi, did not address concerns in Indian Country over prediction markets.
The association called for explicit language stating that federal commodities law does not preempt tribal or state gaming laws, including the Indian Gaming Regulatory Act.
Eight banking trade groups also said the revised text still does not close loopholes that would allow stablecoin rewards to function like deposit interest. According to those groups, the proposed regulatory "circuit breaker" would only activate after community banks had already suffered substantial deposit flight.
Crypto industry groups continue pressing for passage
Crypto industry organizations are still urging senators to advance the legislation. In a statement on Monday, Blockchain Association CEO Summer Mersinger said the industry had made significant concessions to help build bipartisan support and called on every senator to vote yes.
She said the bill would create clear rules, protect consumers and deter illicit activity, while helping prevent crypto jobs, developers and innovation from moving overseas.