CLARITY Act faces ethics showdown as David Nage eyes July vote

The CLARITY Act has advanced toward a potential July Senate vote, though negotiations over conflict-of-interest provisions continue to divide lawmakers.

Summary

• David Nage says the CLARITY Act could reach a Senate floor vote in mid-to-late July if lawmakers resolve ethics provisions.
• Debate has shifted from stablecoin yield rules to conflict-of-interest restrictions for government officials.
• The bill includes $150 million for crypto crime enforcement and protections for blockchain developers and validators.

According to David Nage, managing director and portfolio manager at Arca, discussions with Senate offices and staff members in Washington left him convinced that most of the work surrounding crypto market structure legislation has already been completed.

In a recent report, Nage wrote that the industry and policymakers are roughly “80–85%” aligned on the substance of the bill despite public disagreements that continue to generate headlines.

The legislation, formally known as the Digital Asset Market Clarity Act, has already secured bipartisan support in committee and now awaits further Senate consideration. While several procedural steps remain, Nage argued that the primary obstacle is no longer market structure policy itself.

Ethics language has become the central dispute

Following meetings with congressional staff, Nage said stablecoin yield provisions no longer appear to be a major point of contention. Although banking industry critics, including JPMorgan Chief Executive Officer Jamie Dimon, have continued opposing parts of the legislation, Nage stated that Senate offices largely view the issue as settled.

Instead, debate has narrowed around conflict-of-interest rules that would restrict government officials from benefiting from crypto-related business activities while serving in office.

According to Nage, lawmakers are now focused on how such restrictions would be enforced rather than whether they should exist. He described the disagreement as a political challenge centered on implementation and public perception rather than a dispute over digital asset policy.

To break the deadlock, Nage suggested applying a uniform prohibition on crypto business activity across the President, Vice President, executive branch officials, and members of Congress without creating exemptions for specific individuals.

His base-case scenario assumes lawmakers reach agreement on ethics provisions and reconcile competing Senate proposals in the coming weeks. Under that outcome, Nage expects the bill to reach the Senate floor after Congress returns from recess on July 13.

Enforcement and developer protections remain in focus

While negotiations continue, supporters of the bill have pointed to several provisions designed to strengthen oversight of the digital asset industry.

As previously reported by crypto.news, Senator Cynthia Lummis said the CLARITY Act would allocate $150 million to law enforcement agencies for investigations into cryptocurrency fraud and other digital asset crimes. The legislation would also allow exchanges and stablecoin issuers to temporarily freeze suspicious transactions for up to 30 days, with authorities able to seek extensions of as much as 180 days through written orders.

Additional provisions would subject digital asset businesses to Bank Secrecy Act requirements, including Anti-Money Laundering programs and Suspicious Activity Report obligations similar to those imposed on traditional financial institutions. Supporters have argued that these measures would help investigators trace illicit funds while providing stronger consumer protections.

Elsewhere, industry groups are pressing senators to preserve language tied to the Blockchain Regulatory Certainty Act. Kristin Smith, president of the Solana Institute, said the provision would clarify that blockchain developers, node operators, and validators who do not custody customer assets should not be treated as money transmitters under U.S. law.

Smith said the language would provide legal certainty for open-source software developers and network operators while maintaining a distinction between infrastructure providers and businesses that directly control customer funds. She added that founders, executives, and investors across the crypto industry have urged Senate leaders not to weaken those protections.

Nage also outlined a downside scenario. If lawmakers fail to resolve ethics provisions before the upcoming recess, he warned that the opportunity to pass the legislation during the current Congress could narrow considerably. Senator Cynthia Lummis has similarly cautioned that failure to advance the bill this session could delay action until 2030.