Hours before a Senate vote on a cryptocurrency‑regulation proposal, Sen. Kirsten Gillibrand, D‑N.Y., shifted from privately urging her colleagues to advance the measure to joining all Democrats in voting against it. The motion to move the bill forward fell short of the 60 votes required for a full debate, ending with a 49–50 tally.
Background on the bill and the political clash
The legislation, often referred to as the Clarity Act, was intended to create a federal framework for the crypto industry. Critics, including progressive senators, argued that the bill would effectively serve as a handout to President Donald Trump, who reportedly pocketed $1.4 billion in crypto profits last year. Progressives such as Sen. Elizabeth Warren, D‑Mass., launched a public campaign against the proposal, warning that it would allow Trump to benefit from “corruption.”
Republican sponsor Sen. Cynthia Lummis, R‑Wyo., highlighted Gillibrand’s involvement in negotiations as evidence of bipartisan support, noting that the White House had allegedly conceded “virtually everything that Democrats had asked for” on ethics provisions. Nonetheless, Warren and other Democrats warned that the concessions were riddled with loopholes.
Gillibrand’s reversal and reactions
According to Politico reporting, Gillibrand—who chairs the Democratic Senatorial Campaign Committee and has long been a vocal supporter of the crypto sector—had been lobbying fellow Democrats to vote in favor of advancing the bill. Hours later, she voted with the progressive bloc to block the motion. Her office did not immediately respond to requests for comment.
Progressive group Demand Progress condemned the flip‑flop, with corporate‑power policy adviser Ella Fanger stating, “While Sen. Gillibrand switched her support for the bill at the last minute, we deserve to know why she tried to get her colleagues to rubber‑stamp this corrupt crypto deal, particularly at a time when she is claiming to oppose Trump’s corruption.”
Gillibrand’s aide had earlier argued that proceeding to debate would allow “real ethics reforms on the floor — in full view of the public, seven weeks out from the midterms.” The sudden change underscores the pressure moderate Democrats face amid Trump’s second term, especially given the historic scale of his crypto earnings.
Key provisions and broader implications
The bill contained several provisions that Democrats sought to curb potential presidential self‑dealing. One would have let state attorneys general bring enforcement actions against the president for ethics violations, but staffers for Warren on the Senate Banking Committee said the language rendered the provision a “dead letter” because officials appointed by Trump could issue opinions shutting down such actions.
Another provision allowed Trump to place his crypto holdings in a “blind” trust, a mechanism critics said would not stop him from influencing the industry to increase his profits. Minority staffers for the Senate Banking Committee echoed this concern.
Beyond the presidential ethics angle, the banking industry warned the bill could enable crypto start‑ups to siphon deposits from small local lenders. The vote also carries political risk for Democrats heading into the 2024 midterms; crypto‑industry super PACs possess a “massive war chest” that could be deployed against vulnerable incumbents.
Warren emphasized the electoral stakes, noting that voters want candidates who stand up to “well‑funded industries.” She pointed to primary challengers who opposed crypto and still won, arguing that “the crypto industry doesn’t want to just lobby Congress, they want to buy the Congress that will be favorable to them.”
With the motion defeated, the Senate will not move forward to a full debate on the Clarity Act, leaving the regulatory future of the cryptocurrency sector uncertain while the political fallout continues to unfold.
Helene Elliott is the Lead Science & Space Reporter at News Raise. She reports on aerospace missions, astrophysics discoveries, quantum research, and environmental technology.
