CLARITY Act Negotiations Hit Roadblock Over Crypto Coder Protections
A proposed amendment to protect crypto coders in the landmark CLARITY Act has been rejected by both sides of Washington, highlighting the ongoing stalemate in negotiations. Senate Democrats have submitted two potential candidates each for Democratic seats at the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC), addressing a long-standing personnel dispute that had become entangled with CLARITY talks.
The issue has taken on greater significance because the CLARITY Act would give the SEC and CFTC major responsibility for implementing a new federal digital-asset framework. Democrats have argued that agencies receiving expanded authority should not write those rules without minority-party representation, but the White House is treating Schumer's submissions as political positioning rather than a meaningful breakthrough.
The harder substantive fight emerged this week after two groups representing prosecutors proposed changes to CLARITY's protections for software developers, only to see the offer rejected by both sides of the negotiations. The provision has become a major sticking point for Sen. Catherine Cortez Masto, who has sought to preserve law-enforcement powers over illicit finance without treating developers who merely write software as financial intermediaries.
The ethics fight, however, is moving along a more bipartisan track, with Sens. Ruben Gallego and Thom Tillis finalizing a counteroffer they plan to send to the White House within days. This proposal could provide a different test of the White House's willingness to compromise, as it is being built by senators from both parties before it reaches the administration.