CLARITY Act Odds Crash to 16% as Democrats Reject GOP Crypto Bill

The odds of the CLARITY Act becoming law this year plunged to 16% on Polymarket on Monday, down from a brief spike of 35% the previous day, as key Senate Democrats rejected Republicans' revised crypto bill. Senator Mark Warner, one of the Democrats involved in negotiations, said the updated ethics provisions were "not near enough," and Democratic negotiators began drafting a counterproposal. With 60 votes needed to advance the bill, the legislation faces a critical procedural vote on Tuesday that could stall efforts to define how the SEC and CFTC divide oversight of the US crypto market.

In a separate blow, a bipartisan coalition of 18 state attorneys general, led by New York Attorney General Letitia James, urged senators to reject the latest version, arguing it would weaken state enforcement powers against crypto companies accused of fraud and misconduct. The opposition comes despite Republicans incorporating 126 substantive changes Democrats requested and releasing what they called a "final" draft. The revised bill also includes stricter ethics rules after President Donald Trump agreed to roughly 80% of a bipartisan proposal from Senators Thom Tillis and Ruben Gallego, which could require officials with significant crypto holdings to divest or place assets in a blind trust, while granting state attorneys general a role in enforcing the provisions.

Beyond Washington, the EU moved to tighten cybersecurity oversight of the crypto sector, imposing 24-hour reporting requirements on crypto wallet providers for severe vulnerabilities. The new rules are designed to accelerate disclosure of critical security flaws and strengthen consumer protections across the bloc's digital asset ecosystem.

The convergence of congressional gridlock in Washington and tightening regulatory scrutiny in Brussels underscores a pivotal week for crypto policy on both sides of the Atlantic. With the CLARITY Act's fate hanging on Tuesday's procedural vote and EU cybersecurity rules setting new compliance benchmarks, industry stakeholders are bracing for a period of heightened regulatory uncertainty that could reshape market structure and digital asset oversight well into 2026.