Key lawmakers have secured a significant compromise to strengthen law enforcement provisions within the Clarity Act, the landmark crypto market structure bill that has been struggling to pass the Senate for months.
The bipartisan agreement has been struck between Senate Judiciary Committee Chair Chuck Grassley and Senator Cynthia Lummis. It aims to strike the right balance between protecting technology and addressing the concerns of law enforcement.
White House official Patrick Witt summarized the current state of Capitol Hill negotiations: “The deals will continue until CLARITY improves.”
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The much-awaited compromise
Sources close to the negotiations claim that the new deal empowers prosecutors to bring Anti-Money Laundering (AML) charges against “demonstrably culpable crypto actors.”
Senator Lummis has noted that the deal secures vital protections for software developers (specifically referencing BRCA and Section 1960 safe harbors) while giving agencies the teeth they need to target bad actors.
“Thank you [Chuck Grassley] for ensuring BRCA/sec 1960 protections for software developers are included in the Clarity Act while giving law enforcement tools they need,” Lummis stated. “Clarity Act is the most pro-law enforcement digital asset bill Congress has ever considered. Let’s get this done!”
Growing momentum
The Grassley-Lummis deal is the latest signal that the long-stalled push for a definitive crypto market structure is finally gaining legislative traction.
Late last Friday, the Senate Banking Committee announced plans to “mark up” and vote on the legislation this coming Thursday. If it passes the committee, it will advance to the broader floor for consideration.
The market is heavily pricing in a legislative victory. On Kalshi, a popular regulated prediction market, the odds of a comprehensive Bitcoin and crypto market structure bill passing this year have surged past 75%.
“Panic mode”
The American Bankers Association (ABA) has launched an 11th-hour lobbying blitz to stall or heavily amend the bill.
ABA President and CEO Rob Nichols is demanding immediate engagement to alter the bill’s language regarding stablecoins.
Nichols has acknowledged that the current version of the bill is an improvement, but it has still warned that it “does not adequately prevent crypto companies from offering interest-like rewards on payment stablecoins.”
“Without additional changes, we believe the current proposal would unnecessarily incentivize the flight of bank deposits into payment stablecoins, putting both economic growth and financial stability at risk,” Nichols wrote.