CLARITY crypto market-structure bill hits ethics and enforcement hurdles with 31 Senate days left

BlockBeats, June 11 — The Cryptocurrency Market Structure Act, better known as the CLARITY Act, is running into two major roadblocks as it moves through the U.S. Senate, with just 31 legislative days left before the August recess. On Tuesday, a bipartisan group of senators held a closed-door session with Patrick Witt, executive director of the White House Crypto Task Force, but left without a resolution. Talks derailed after Republicans and the White House walked back a tentative ethics-related deal that had been reached ahead of the May Banking Committee review. The earlier draft included language allowing state attorneys general to sue the Department of Justice over alleged enforcement failures. Legal experts said that approach lacks a constitutional basis for forcing DOJ action through state officials. Republicans countered with a proposal to keep enforcement authority solely in the hands of federal attorneys general and to shift accountability to impeachment. Democratic senators described the change as a full reversal, leaving negotiations stalled. Further discussions are expected Thursday. Democratic senators Ruben Gallego and Angela Alsobrooks have tied their support to tougher ethics guardrails aimed at President Trump's cryptocurrency business interests. Reuters has estimated those ventures have generated about $2.3 billion for Trump and his family since his return to the White House. A second flashpoint centers on law-enforcement concerns over Section 604, referred to as the Blockchain Regulatory Certainty Act. The provision would explicitly shield noncustodial software developers from liability for how third parties use their code. Law-enforcement agencies warn it could complicate investigations into on-chain crimes such as money laundering. On Wednesday, the White House Crypto Committee is set to meet with representatives from the Sheriff's Association and the Police Brotherhood, along with officials from the Department of Justice, the Treasury Department, and FinCEN, to focus on the clause. Administration officials plan to argue the language does not create a safe harbor for criminals. Senators Mark Warner and Catherine Cortez Masto said they will not back the bill unless law-enforcement concerns are addressed. The compressed Senate calendar is increasing pressure to reach a deal before the August recess, widely viewed as the informal cutoff for moving the bill ahead of the midterm elections. Separately, the House Ways and Means Committee held a hearing Tuesday on crypto taxation. Lawmakers reviewed six Republican-led bills and a discussion draft touching on mining, the tax treatment of staking rewards, and voluntary disclosure programs. Key issues remain unresolved, including a minimum exemption threshold for small Bitcoin transactions, DeFi, and international tax frameworks. According to PolyBeats, prediction market Polymarket currently puts the odds of the CLARITY Act passing this year at 48%.