CLARITY Act negotiations move ahead with tougher customer protection measures

Senate Democrats have secured additional customer protection measures in the latest CLARITY Act negotiations as lawmakers continue working to finalize the crypto market structure bill ahead of a possible floor vote.

CNBC reported that Senate negotiations over the Digital Asset Market Clarity (CLARITY) Act have produced new customer protection provisions sought by Democratic lawmakers, even as unresolved ethics rules continue to delay the release of the bill’s final text.

Speaking in an interview with CNBC on Monday, Coinbase vice chair Ryan VanGrack said Democratic senators used the ongoing negotiations to strengthen safeguards for digital asset users, describing the changes as giving the legislation “more teeth.” He said the revisions were designed to address shortcomings in the existing regulatory framework but did not provide details about the new language.

“[A]t the end of the day, this is about customer protections,” VanGrack said. “The status quo lacks this infrastructure, lacks these protections, and the Democrats used this opportunity, wisely, to make sure that customers were first and foremost in [this bill].”

His comments come as Senate negotiators continue to work through several unresolved issues before lawmakers can publish a final version of the legislation. While customer protections have moved forward, ethics provisions tied to elected officials’ crypto interests remain the largest obstacle to a bipartisan agreement.

Ethics dispute continues to delay final Senate text

Separate reporting from Crypto In America previously said the White House had not approved proposed ethics language as of July 20, leaving Senate negotiators without guidance on what restrictions the administration would support.

The dispute has centered on proposals that would limit how senior government officials, including presidents, could profit from digital asset businesses while shaping federal crypto policy. Democratic lawmakers have argued that such safeguards are necessary, citing President Donald Trump’s financial interests in the crypto sector.

Trump disclosed as much as $1.4 billion in earnings from digital asset ventures, including Official Trump (TRUMP), World Liberty Financial and other crypto investments, according to his June financial disclosure.

Republican senators met with Trump last week to discuss the legislation, but Democrats have continued pressing for stronger ethics provisions before offering the votes needed to advance the bill. Senate Majority Leader John Thune has also acknowledged that Republicans still have not secured the bipartisan support required to overcome procedural hurdles.

The Senate has not released the revised legislative text or scheduled a floor vote.

Customer protections move ahead while other issues remain unresolved

Although ethics negotiations continue, VanGrack indicated that discussions over customer safeguards have resulted in meaningful changes to the legislation.

Without describing the revised language, he said the negotiations have focused on making sure consumer protections become a central part of the market structure framework instead of remaining secondary considerations.

His remarks align with earlier reporting that customer protections have become one of several areas under active negotiation alongside stablecoin yield rules, decentralized finance provisions and law enforcement authorities.

As previously reported by crypto.news, banks and crypto companies have taken opposing positions on whether regulated stablecoins should be allowed to offer rewards. Banking organizations have argued such incentives could draw deposits away from traditional banks, while digital asset firms have pushed to preserve activity-based rewards within a regulated system.

Developers of decentralized software have also become part of the negotiations through the proposed Blockchain Regulatory Certainty Act (BRCA), which would prevent qualifying developers from automatically being treated as money transmitters if they do not control customer funds or execute transactions.

Law enforcement organizations have opposed those protections, arguing they could make investigations involving illicit finance more difficult. Blockchain Association CEO Summer Mersinger previously told Crypto In America she expects the BRCA language to remain in the Senate version of the legislation despite those objections.

Coinbase’s position has changed since earlier negotiations

Coinbase’s public support for the legislation follows a different position taken earlier this year.

In January, CEO Brian Armstrong said the exchange could not support an earlier version of the CLARITY Act as drafted, a statement that was widely viewed as contributing to delays during Senate Banking Committee discussions.

Since then, Coinbase executives have publicly backed the legislation as negotiations continued. Alongside VanGrack, chief legal officer Paul Grewal has also urged senators to approve the bill.

The exchange has remained closely tied to the broader regulatory debate after the U.S. Securities and Exchange Commission sued Coinbase during the Biden administration, alleging the company operated as an unregistered securities exchange, broker and clearing agency. The SEC later dismissed the case after Trump took office, when the agency was led by acting Chair Mark Uyeda.

Senate faces limited time before August recess

The negotiations are unfolding as lawmakers approach a narrowing legislative window before the Senate’s scheduled August recess.

White House crypto adviser Patrick Witt, who serves as executive director of the President’s Council of Advisors for Digital Assets, recently deferred his Judge Advocate General military training to remain in Washington and continue leading negotiations for the administration. Witt said in a July 20 post on X that his training had been postponed so he could “see this effort through to the end.”

His decision avoids an immediate leadership change after White House Crypto Council deputy director Harry Jung announced plans to leave government service in the coming weeks.

The Senate is scheduled to hold its final session before the state work period on Aug. 7, giving negotiators limited time to resolve outstanding disagreements. Even if the Senate approves its version of the CLARITY Act, differences with the House-passed bill would still need to be reconciled before the legislation could reach Trump’s desk.

Prediction markets have become increasingly cautious as negotiations continue. As previously reported by crypto.news, Polymarket traders placed the probability of the CLARITY Act becoming law in 2026 at 31%, with unresolved ethics provisions and other outstanding disputes weighing on expectations.

For the crypto industry, the legislation would establish a federal market structure framework by dividing oversight responsibilities between the Securities and Exchange Commission and the Commodity Futures Trading Commission. Until negotiators settle the remaining disagreements and publish the updated text, the bill’s path remains tied to bipartisan talks in the Senate.