Republicans reject Democrats’ CLARITY Act counteroffer ahead of vote

The CLARITY Act, Congress’s most ambitious attempt to draw clear regulatory lines around digital assets, appears to be running out of runway. Senate Republicans rejected a Democratic counteroffer late on September 14, setting the stage for a cloture vote on September 15 at 2:15 p.m. ET that few expect will succeed.

The math is brutal. Republicans hold 53 Senate seats, meaning at least seven Democrats need to cross the aisle to hit the 60-vote threshold for cloture.

How a bipartisan bill became a partisan standoff

The House passed the CLARITY Act 294-134 in July 2025, with 78 Democrats voting in favor. The bill’s core idea is straightforward enough: split digital asset oversight between the CFTC and the SEC. Tokens that qualify as digital commodities would fall under the CFTC’s purview, while securities-like assets would remain with the SEC. No specific tokens are named in the legislative text, a deliberate choice to keep the framework broad rather than reactive.

The Senate Banking Committee advanced the bill in May 2026 with a 15-9 vote, picking up two Democratic votes along the way.

Republicans released what they called their “last, best and final offer” on September 14, a revised draft incorporating 126 changes that Democrats had requested. Many of those changes centered on ethics provisions, specifically requiring federal officials to divest their digital asset holdings. President Trump endorsed this version of the bill.

Democrats came back hours later with their own counterproposal, zeroing in on two areas: stronger ethics enforcement mechanisms and expanded authority for state attorneys general. Republicans dismissed it almost immediately, signaling that they viewed the negotiation window as closed.

The opposition coalition

A coalition of 18 state attorneys general has lined up against the CLARITY Act, and the group isn’t neatly partisan. Some Republican AGs have joined the opposition, primarily over concerns that the federal framework would preempt state-level enforcement powers.

Banking lobbyists have also weighed in against the bill, concerned that the CLARITY Act could invite new competitors operating under lighter-touch CFTC oversight rather than the more stringent SEC and banking regulatory frameworks they already navigate.

What the prediction markets are saying

Prediction markets currently put the odds of the CLARITY Act passing at around 18%.

The ethics provisions have become the central sticking point. Both sides agree that federal officials should face restrictions on their digital asset dealings. The disagreement is over enforcement teeth: who polices compliance, what penalties apply, and whether state AGs retain independent authority to act.

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