The CLARITY Act bank committee reviewed successfully, and all Democratic amendments failed.

Written by: Sanqing, Foresight News

On May 14 at 22:30, across the ocean, the seats in the conference room of the U.S. Senate Banking Committee were all filled. 24 senators (13 Republicans, 11 Democrats), lobbying teams from various sides, and media reporters awaited a bill that had taken four years to take a critical leap here.

Two hours and twenty minutes later, the CLARITY Act passed the committee review with 15 votes in favor and 9 votes against, officially submitted for a full Senate vote. All 13 Republican committee members voted in favor, with Democrats Gallego (Arizona) and Alsobrooks (Maryland) showing bipartisan support, while Warren and 9 other Democrats voted against.

12 consecutive defeats, each leaving a record

Previously, members of the Senate Banking Committee submitted over 130 amendments, with Warren alone proposing 44. However, according to the rules announced by Chairman Scott at the outset, the majority of the amendments were rejected for procedural reasons before the meeting convened, with only a small portion actually entering discussion and vote today.

As the review began, Warren set the tone.

She described it as "a bill drafted by the crypto industry for the crypto industry," stating that the committee had never held any public hearings on this bill and citing a CoinDesk survey showing that only 1% of voters listed cryptocurrencies as a top concern.

She then spent nearly ten minutes listing the five major flaws of the bill: weakening investor protections established since 1929, eliminating state consumer anti-fraud regulations, repeating the mistakes of 2008, national security loopholes, and condoning the Trump family's conflicts of interest in cryptocurrencies.

Scott's response was three words: consumers, innovation, national security.

The amendment voting then began, and the Democrats lost every single one.

None of Warren's 5 amendments passed: requiring investment advisors to assume fiduciary responsibility for cryptocurrency assets, restoring the legal authority for the Treasury to sanction mixing platforms, deleting provisions allowing banks to hold cryptocurrency assets and abolishing the Volcker Rule, and establishing a stable source of funding for the CFPB.

The most dramatic was Amendment 66, where she cited publicly available documents from the Department of Justice, stating that Epstein invested $3 million in Coinbase through his company in 2014, demanding the disclosure of bank inspection records related to Epstein and asserting that JPMorgan handled over 4,700 transactions for him between 1998 and 2013, totaling more than $1 billion.

The remaining 7 amendments from Democratic lawmakers also all failed.

Reed described Iran collecting tolls using stablecoins in the Strait of Hormuz, citing 14 U.S. soldiers killed due to drone attacks funded by Iran, asking for government power to freeze relevant accounts; he also proposed clarifying the dollar's status as the only legal currency. Moreno, while rebutting, self-deprecatingly remarked that he paid $3,000 in taxes using two bitcoins in 2016, which today are worth $160,000.

Van Hollen proposed prohibiting the president and members of Congress from issuing cryptocurrency assets, directly naming the Trump family's cryptocurrency dealings with the UAE royal family; he also demanded criminalizing the release of DeFi protocols for money laundering purposes.

Cortez Masto attached a joint opposition letter from the National Sheriffs' Association and seven other law enforcement agencies, calling for fixing DeFi enforcement loopholes; Smith cited data showing that the 2022 cryptocurrency crash wiped out nearly $2 trillion, demanding that federal agencies refrain from rescuing the crypto industry; Kim called for modernizing the Bank Secrecy Act to cover DeFi platforms.

All 12 amendments put to vote were defeated along party lines 11:13, with the vote count never changing.

However, Warren's defeats were not simple; each of her amendments corresponded to a public narrative node: the sanctions authority for Tornado Cash, Trump's conflicts of interest, Epstein's early connections to the crypto industry, Iran collecting tolls with stablecoins in the Strait of Hormuz, and 14 U.S. soldiers killed due to drone attacks with funds traceable to crypto transactions. These issues were rejected at the committee level but will enter the political debate of the full Senate vote.

Warren is setting the price for the Democrats in the full vote.

The rules are flexible, but only in one direction

With the exception of Britt's withdrawn retirement account amendment prior to the vote, all amendments proposed by Republicans passed. The AI financial sandbox amendment proposed by Rounds passed with bipartisan support 15 to 9, McCormick's portfolio margin amendment passed 18 to 6, and Lummis's five bipartisan amendments also won high approval of around 18 votes each.

About two hours into the deliberation, the most intense procedural controversy of the day arose.

Lummis announced that, at the request of some Democratic members, she would reinstate five previously rejected amendments on the grounds of "drafting errors." Scott immediately agreed.

Warren immediately protested: "You initially said, rules are rules, and you wouldn't pick and choose. You rejected our 16 amendments on procedural grounds. Now you suddenly decide to release 3 Republican amendments, labeling it bipartisan consensus. But our amendments, those supported by law enforcement agencies, requested by community banks, none of them you let through. What kind of rules are these?"

Scott's response was straightforward: "Around 11:05 am, a Democratic member approached me saying they could support a bipartisan proposal. I listened to both parties' requests and made what I thought was the most beneficial decision for America."

This was the clearest display of power today. The Republicans hold a majority and could have forced through any content with 13 votes, but they chose to trade concessions for bipartisan endorsement. The reason is pragmatic; a full Senate vote requires 60 votes, and forcing the committee approval along party lines would just meet greater resistance in the full vote.

Subsequently, Lummis's 5 amendments were passed in sequence with a bipartisan majority of 18 to 6, covering DeFi decentralized identification standards, the scope of bank digital asset activities, tokenized securities rule-making, insider trading prohibitions, and investor protection enforcement. On each, Warren criticized them one by one as "fig leaves," stating they did nothing to address the fundamental flaws of the bill.

The Republicans today chose to trade compliance for political legitimacy, using specific provisions to gain two Democratic votes. The price is the acknowledgment that the bill is still incomplete, but the benefit is that the outcome appears as if both parties were involved.

Lummis used a metaphor at the closing: "We are like a dog that has bitten onto a tire, the tire keeps spinning, and our heads keep hitting the ground, but we cannot let go because we have bitten down."

Two votes, each with conditions

Before the final vote, Gallego and Warner withdrew their own amendments in succession.

Gallego mentioned that he has spent a lot of time on this bill over the past year and has had repeated negotiations with Lummis, Tillis, and Moreno.

Then he said a sentence: "My committee vote does not signify a commitment to the full vote. We still need to sit down and talk with our colleagues from the Agriculture Committee, and we need an ethical provision applicable to all elected officials. If these issues are not resolved before the full vote, I am not afraid to vote against it." After saying this, he voted in favor.

Alsobrooks's statement was more direct. She stated that she has been at the negotiation table for over nine months, bringing her background as a former prosecutor and concern for community banks, discussing every detail of consumer protection, deposit outflows, and law enforcement authority. She then also expressed: "My vote today is a statement of intent to continue advancing negotiations in good faith, not indicating that I will vote in favor during the full Senate vote."

She listed three prerequisites: concerns of law enforcement agencies regarding financial crime loopholes, ethical provisions applicable to all elected officials (including the president and vice president), and negotiations to merge with the Agriculture Committee's version.

And Warner, the most cooperative Democrat throughout, voting in favor of every one of Lummis's amendments, while withdrawing his own amendment said, "I am in crypto hell, but I am moving forward," ultimately voted against the bill during the vote.

Gallego and Warner's two votes are the most expensive acquisition for the Republicans today and the most unstable assets. Scott specifically thanked Witt at the closing, stating "without the White House actively engaging Democrats, this step could not have been completed in a bipartisan manner." He also joked about Gallego: "I am shocked that Gallego can talk nonstop. Colombians voted to support us; thank God." Laughter briefly broke the tense atmosphere of the two-and-a-half-hour standoff.

But after the laughter, the conditions still remained.

51 days, three mountains

Scott stated: "This is just the first step, not the last step."

From committee to the bill's enactment, the CLARITY Act still requires a full Senate vote (60 vote threshold), coordination of a unified text with the House of Representatives' 2025 version, unanimous agreement from both chambers to be sent to the president for signing, and the SEC and CFTC to jointly draft the rules within 360 days of the bill's enactment. The target set by the Trump administration is to complete the legislation by July 4, leaving only 51 days from May 14.

The three core obstacles have yet to be resolved. Ethical provisions are a red line for the Democrats, but the White House has clearly rejected any provisions targeting specific positions; the Agriculture Committee's version has been deemed "unacceptable" by Warnock in terms of consumer protection, and merging the two versions will be another negotiation starting from scratch; law enforcement's concerns over cryptocurrency laundering loopholes saw no amendments make it into the bill text today.

The Senate Republicans hold about 53 seats, needing 7 more votes to reach 60. Gallego and Alsobrooks provide 2 votes, not 7 votes, and both come with additional conditions.