Inside the last-minute political breakdown that doomed the Clarity Act vote
Last minute, behind-the-scenes disputes locked in a dismal showing for the market structure legislation the industry pinned its greatest hopes on.
Senator Cynthia Lummis' disappointment was already palpable the day before the U.S. Senate shot down the Digital Asset Market Clarity Act. She stood on a stage at a crypto event in Washington and talked about how she'd worked on the bill for more than five years — the bulk of her career as a senator.
Lummis, who is retiring soon, knew by then that things were going badly. She and other Republicans had made what they characterized as their final offer, which they argued carried more concessions to Democrats, including another agreement from President Donald Trump to accept unprecedented ethics constraints on his crypto holdings. But Democrats were already rebuffing it and coming out with more demands.
From the other side, the Democrats saw legislation that they argued was substantially similar to what was already on the table and still let Trump evade real responsibility for conflicts of interest in controlling a crypto empire while also steering its oversight. That didn't really have much to do with the actual crypto market structure policies at the heart of the bill, but it's the issue they circled their wagons around.
When the legislative talks picked up pace again, it was already late in the congressional session, with lobbyists and lawmakers well aware that the election was looming that would make it harder to secure bipartisan legislative work. All along, the ethics question stood as the center of debate and the aspect that needed to be ironed out if the rest were to proceed.