A Retiring Republican Just Became the Biggest Threat to the Senate Crypto Bill

TLDR

• Republican Senator Thom Tillis says he will vote against the Clarity Act unless it includes ethics provisions
• Tillis wants rules limiting how White House officials can profit from crypto
• Democrats also want a ban on federal employees endorsing or issuing digital assets
• Investment bank TD Cowen calls Tillis the “latest roadblock” to the bill passing
• Analysts now put the odds of the bill passing this year at one in three

Republican Senator Thom Tillis has threatened to vote against the Senate’s crypto market structure bill, known as the Clarity Act, unless it includes language restricting how government officials can use or profit from crypto.

Tillis is a senior member of the Senate Banking Committee. That role gives him direct influence over whether the bill advances.

He is also not seeking re-election, which analysts say makes him less likely to back down under political pressure from the White House.

Investment bank TD Cowen described Tillis as the “latest roadblock” to the bill. “We do not see Tillis backing down as he just won a standoff with the President over the Federal Reserve,” said Jaret Seiberg, managing director at TD Cowen’s Washington Research Group.

Tillis had earlier blocked a vote on Kevin Warsh’s nomination as Fed chairman, only dropping his opposition after a Justice Department probe into current chairman Jerome Powell was dropped on Friday. He then said he would support Warsh for the role.

Ethics Provisions at the Center of the Debate

Democratic lawmakers have pushed hard for ethics rules in the bill. Senator Adam Schiff said earlier this year that Democrats want “a ban on sponsoring, endorsing or issuing digital assets that applies to all federal employees,” including the president.

That language would likely affect the Trump family, which has launched a memecoin and non-fungible tokens tied to the president’s name and image.

Democratic Senator Ruben Gallego said there is “no final bill — no final movement — unless there is a bipartisan agreement when it comes to the ethics provision.”

What the Bill Does

The Clarity Act splits crypto regulation between the Commodity Futures Trading Commission and the Securities and Exchange Commission. The House passed its version of the bill in July.

The bill has faced repeated delays tied to ethics rules, stablecoin yield payments, and other unresolved issues.

TD Cowen’s Seiberg listed additional hurdles, including a shortage of commissioners at the CFTC, concerns about the Trump-linked crypto project World Liberty Financial, and questions around Iran’s use of crypto payments.

Seiberg said last month he is “increasingly pessimistic” and puts the odds of the bill passing this year at one in three. He has previously said the bill could slip to 2027, with final rules potentially taking effect as late as 2029.

Tillis asked the Senate Banking Committee last week to delay a markup on the bill until May.

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