According to Polymarket, the odds of the CLARITY Act passing this year plunged again on Monday after a spike the previous day: key Democrats in the Senate reportedly said the Republican Party's final offer on the cryptocurrency bill did not convince them.
Polymarket traders initially took the recently revised Republican offer with enhanced ethics provisions as a positive signal, raising the odds to 35%. However, as doubts about the revised text grew, their confidence waned, and on Monday, the odds fell back to 16%.
U.S. Senator Mark Warner, one of the Democrats involved in the negotiations, reportedly stated that the revised ethics provision was "far from sufficient," and negotiating Democrats began preparing a counter-offer on Monday.
Republicans need 60 votes to advance the bill, and failure on Tuesday could stall the legislation, which would define how the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission divide oversight of the U.S. cryptocurrency market.
Key Democrats remain unconvinced by ethics proposal
Brendan Pedersen from Punchbowl News reported that Senator Raphael Warnock stated: Democrats should not advance legislation that does not address opportunities for corruption happening "in real-time."
Pedersen reported that Senator Ruben Gallego stated: the latest ethics proposal "falls short," and that he plans to work on a counter-proposal. Separately, Pedersen reported that staff of Senator Elizabeth Warren on the Senate Banking Committee circulated talking points stating that the proposed enforcement mechanism by state attorneys general could be overridden by White House ethics officials.
Later, Democrats sent their counter-offer to Republican negotiators, Politico reported, citing three people familiar with the situation.
Not all Democrats oppose advancing the bill for a floor vote. Senator Kirsten Gillibrand privately urged colleagues to support the procedural motion, Politico reported.
Republican Senator Cynthia Lummis stated that President Donald Trump had agreed to two substantial ethics provisions and that Democrats have "nothing more to offer."
The resistance adds to opposition from a coalition of 18 state attorneys general and heightens uncertainty about whether Republicans can gather the votes needed to advance the bill.
Banking and tribal groups challenge latest text
The National Indian Gaming Association, an organization representing tribal gaming interests, called on member tribes to pressure senators to vote against the bill, stating that the proposed DeFi changes do not address Native American concerns about prediction markets.
The association called for the inclusion of explicit language affirming that federal commodity legislation does not supersede tribal or state gaming laws, including the Indian Gaming Regulatory Act.
Related: Revised CLARITY Act Targets 'Non-Decentralized' DeFi Operators
Eight banking trade groups also stated that the revised text does not close loopholes allowing the payment of rewards on stablecoins that function similarly to deposit interest. According to the groups, the proposed regulatory "circuit breaker" only activates after significant deposit outflows from community banks have already occurred.
Crypto industry representatives have urged senators to advance the bill. In a statement released Monday, Blockchain Association CEO Summer Mersinger stated that the industry had made significant concessions to help build bipartisan support and called on every senator to vote for the bill.
She argued that the bill would establish clear rules, protect consumers, and deter illegal activity, while also preventing the offshoring of crypto jobs, developers, and innovation.
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