The U.S. Senate’s effort to advance the Digital Asset Market CLARITY Act has hit another hurdle as lawmakers remain divided over one key issue: who should enforce ethics rules for government officials with crypto interests. The disagreement has become the biggest obstacle to moving the long-awaited market structure bill forward, even as bipartisan negotiators continue talks on Capitol Hill.
According to reports, Senate Democrats want state attorneys general to have the authority to enforce the proposed ethics restrictions. However, the White House and Republican negotiators are insisting that enforcement should remain with the U.S. Department of Justice (DOJ) under the attorney general. The issue has become central to the bill, with negotiators suggesting that a compromise on ethics could unlock progress on the rest of the legislation.
The latest setback came after Senator Angela Alsobrooks, one of only two Democrats who previously supported advancing the bill out of the Senate Banking Committee, publicly criticized the White House’s proposal. She reportedly called giving sole enforcement power to the DOJ “an unserious offer” and warned she might withdraw her support if the proposal does not change. Her stance is important because Republicans will likely need Democratic votes to reach the Senate’s 60-vote threshold.
Lawmakers from both parties kept negotiating on Tuesday, focusing mainly on ethics. Discussions are also covering decentralized finance (DeFi) provisions and stronger consumer protections, although officials have shared few details. Coinbase Vice Chair Ryan VanGrack reportedly said the revised draft adds “more teeth” to consumer safeguards, suggesting the legislation is becoming more robust.
🚨NEW: @Sen_Alsobrooks tells me the White House’s idea to have the Department of Justice enforce the Clarity Act’s ethics provisions is an “unserious offer” and says she would not support the bill if that is the only enforcement option.
Senator @berniemoreno, who has been… https://t.co/XLZ2Nsm9Pc
— Eleanor Terrett (@EleanorTerrett) July 21, 2026
Crypto journalist Eleanor Terrett said the White House recently sent updated ethics language to Senate Republicans after some productive talks. Senator Cynthia Lummis’ office is hopeful that a revised version of the bill could come out soon. Still, negotiators have not settled the enforcement issue, so the timeline for the bill remains unclear.
The proposed ethics provisions are expected to apply to the president, vice president and members of Congress. They have attracted particular attention because President Donald Trump and his family have business interests linked to the crypto industry, including a stake in World Liberty Financial. While the administration maintains it has agreed to the strongest ethics provisions proposed so far, Democrats continue to argue that independent enforcement is necessary to avoid potential conflicts of interest.
Time is also becoming a major factor. Senate leaders hope to pass the CLARITY Act before their August break, with August 7 seen as a key deadline. If the Senate approves the bill, the House of Representatives will still need to vote on it when lawmakers return in September. The future of this highly anticipated crypto regulation bill remains unclear until the ethics dispute is settled.
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