The Senate Banking Committee advanced the Digital Asset Market Clarity Act by a vote of 15-9 on Thursday, with Sens. Ruben Gallego (D-Ariz.) and Angela Alsobrooks (D-Md.) joining all 13 Republicans to move the comprehensive cryptocurrency market structure bill to the full Senate.
The Clarity Act is a Senate bill Try to build A federal framework for digital asset and stablecoin trading and brokers, splitting oversight between the SEC and CFTC, and establishing registration, disclosure, and compliance rules for exchanges, brokers, and custodians. It is now being introduced alongside a related bill from the Senate Agriculture Committee, and the two texts are expected to be combined before a vote on the floor.
Chairman Tim Scott (R-SC) viewed tokenization as a turning point after years in which cryptocurrency companies operated in what he called a “regulatory gray area” under “outdated rules.”
The bill aims to protect consumers, preserve innovation in the United States and “close the doors that criminals, terrorists and hostile regimes have tried to exploit,” he said, after months of cross-party talks that expanded the draft by more than 200 pages.
Sen. Cynthia Lummis (R-Wyo.), who leads the committee’s Digital Assets Committee, called the Clarity Act “the most difficult legislation” she has worked on in decades in state and federal offices. She described it as a “first impression case” that attempts to incorporate new asset types and programs into a regulatory code designed for previous markets.
Warren camp: “The industry is written” and “not ready”
Ranking Member Elizabeth Warren (D-Mass.) He led the oppositionarguing that the committee should focus on grocery, health costs and credit card rates, not “a bill written by the cryptocurrency industry for the sake of the cryptocurrency industry.”
Warren warned that the bill “cuts a loophole” in securities law that has protected investors since 1929, preempts state anti-fraud rules, and allows banks to increase exposure to volatile cryptocurrencies in ways she linked to pre-2008 practices.
She said the bill “declares open season on defrauding American consumers who use cryptocurrencies,” and accused Republicans of introducing a framework that helps “the President of the United States defraud cryptocurrencies.”
Sen. Raphael Warnock (D-Ga.) linked his “no” vote to ethical concerns, calling President Donald Trump’s digital asset trading relationships “pure corruption,” and criticized Republicans for rejecting enforceable conflict-of-interest rules for all elected officials, including the president and vice president.
Illicit finance, mixers and stablecoins
National security concerns led to a series of Democratic amendments that Republicans rejected by an 11-13 vote. Warren proposed stronger sanctions tools against cryptocurrency mixers and DeFi services, pointing to the Treasury Department’s 2022 plan. hiring From Tornado Cash and the warning that the bill does not isolate mixers in the law.
Sen. John Kennedy (R-Los Angeles) pressed her on why the new anti-money laundering sections didn’t already cover these services, then joined Republicans in rejecting the proposal.
Senator Jack Reed (D-RI) described what the Iranian actors were like is used Stablecoins to purchase drone components, import sensitive goods and collect transportation fees from tankers in the Strait of Hormuz. He said the Treasury still needs to “collaborate” with issuers like Tether for voluntary cooperation, and is seeking clear authority for regulators to block illicit foreign stablecoin flows; His amendment failed along the same partisan divide.
Sen. Chris Van Hollen (D-Md.) pointed to estimates that more than $150 billion in digital assets flowed through wallets linked to illicit activity last year and highlighted a major North Korean stock exchange hack where DeFi services helped launder money.
His proposal to make issuing a DeFi protocol for the stated purpose of enabling money laundering, sanctions evasion or terrorist financing illegal also received an 11-13 vote, after Republicans argued that existing criminal laws already provide for such behavior.
Republicans, led by Lummis and Sen. Bernie Moreno (R-Ohio), responded that Titles II and III of the bill already tie digital asset brokers to the Bank Secrecy Act, expand the Treasury Department’s “special measures” authority and place kiosks, brokers and exchanges under clearer federal oversight than the House version.
President Trump, Universal Freedom, and Failed Ethics Amendments
Ethical judgments relate to Trump’s business relations with Global financial freedom And other cryptocurrency projects have produced some of the most intense exchanges. Van Hollen offered an amendment to bar the president, vice president, and members of Congress from having business relationships with cryptocurrency companies and require more disclosure, saying it was necessary because “the president and members of his family” are involved in “corrupt cryptocurrency projects and various cryptocurrency scams.”
Moreno said that this measure belongs to the Judiciary Committee because it includes criminal penalties, and he defended Trump and described him as a “good man,” accusing Van Hollen of declaring criminal conduct without a judicial record. Amendment 11-13 fails.
Warren tried to force banking regulators to release secret supervisory records related to Jeffrey Epstein, arguing that Epstein supported early investments in cryptocurrencies and that test files could reveal what banks and supervisors knew as he moved money through major institutions. Loomis responded that the classified oversight provisions fell outside the scope of the market structuring bill, and that this amendment also failed, even after Kennedy said he would have supported it without the “conspirator” language.
The safe haven DeFi deal exposes the democratic divide
One of the most important votes came on Loomis Amendment 122, a technical package It was negotiated With Sen. Mark Warner (D-Virginia) making an improvement when a DeFi protocol is considered to be controlled by a small group and interacts with the bill’s underlying safe havens.
Warren claimed that the amendment includes a “narrow test” by which entities are considered to be cryptocurrency intermediaries and imports a Section 604 “loophole” that protects decentralized services from basic anti-money laundering rules, saying that “it doesn’t matter if you have rules if no one has to follow them.”
After a brief technical fix to strike two lines, the committee adopted the amendment 18-6, with Warner, Cortez Masto, and Allbrooks joining the Republicans. This vote represented a clear divide: Warren, Reed, and Van Hollen opposed compromise, while the “Crypto Democrats” bloc accepted the DeFi framework as a basis for improvement before the hearing took place.
Process battle over which amendments will be heard
The tags also turned into a test of Scott’s control of the edit roster. Before the hearing, more than a dozen filibuster proposals were ruled out for drafting and filing reasons, including a National Sheriffs’ Association-backed reform from Sen. Katherine Cortez Masto (D-Nev.) on decentralized platform enforcement and a community bank-backed stablecoin yield amendment from Reed and Sen. Tina Smith (D-Minn.).
Later, seeking a bipartisan outcome, Scott reintroduced several amendments, including H.R. 122, after Democrats like Warner and Gallego said a committee vote on those waivers would make support easier. Warren objected, saying he was reviving a subset of the Republican side’s language while leaving law enforcement and community bank proposals aside.
Van Hollen noted that some of his properly drafted amendments were never voted on, even after Loomis’ previously disqualified text passed by an 18-6 vote.
Scott responded that he and Warren had agreed to cap amendments on each side, and that within that cap he was using discretion to serve Democrats who wanted a bipartisan outcome.
Gallego and Allbrooks give the Clarity Act its bipartisan backbone
Throughout the day, Republicans accepted targeted changes supported by industry and moderates, including an artificial intelligence fund proposed by Senator Mike Rounds and conservative fringe language used by Senator Dave McCormick, both of which were adopted with support from Democrats. They rejected every Democratic attempt to expand sanctions tools, block bailouts, tighten DeFi liability, or write ethics rules into the bill.
By the final vote, the Democratic side was divided into clear camps. Warren, Warnock, Van Hollen, Smith, and Reed have built a record that offers clarity as an industry-driven framework that weakens implementation and leaves presidential conflicts untouched. Warner helped formulate the basic language, but retained his influence in later stages.
Gallego and Albrooks provided the crucial Democratic votes that turned the bipartisan bill into a caucus committee win by 15 votes to 9, while both indicated that support on the floor will depend on further movement on ethics and implementation as the bill heads toward merging with the Agriculture Committee’s version and testing 60 votes before the full Senate.
