Senator Kirsten Gillibrand believes the Senate’s efforts to create rules for the crypto market won’t succeed if they don’t include a rule stopping government officials from using their position to personally profit from cryptocurrency.
Senator Gillibrand, speaking at Consensus 2026, stated that the latest draft of the CLARITY Act still needs work in three key areas: protecting consumers, preventing illegal financial activity, and establishing ethical guidelines. Her remarks highlight that preventing political corruption is a major focus as lawmakers attempt to pass the bill before their summer break.
Senator Gillibrand stated that the bill won’t pass without a section addressing ethical concerns. She explained that it’s unacceptable for members of Congress, high-ranking officials, presidents, or vice presidents to personally profit from industries they have inside knowledge of.
Gillibrand makes ethics clause a red line
Senator Gillibrand explained that the rule is necessary to prevent cryptocurrency regulations from being used for personal gain or political favors.
She stated that this practice represents the most egregious instance of exchanging money for political favors, a serious breach of campaign finance laws, and a direct violation of the Constitution.
The senator said legislators are working to get Republicans, fellow members of Congress, and the White House to agree to include the ethics rule in the final version of the bill.
Senator Gillibrand stated that this specific part of the bill is essential for its passage. She explained that without it, she fears corruption and self-interest in Washington will destroy the industry the bill is meant to support.
The new GENIUS Act, which creates federal rules for payment stablecoins, went into effect in July 2025. President Trump signed the bill, officially known as S.1582, on July 18, 2025. Senator Gillibrand was the leading Democrat in the Senate who helped pass the stablecoin legislation.
Three issues remain before Senate markup
According to Senator Gillibrand, reaching a deal in the Senate now hinges on finalizing agreements in three key areas: better protections for consumers, measures to combat illegal and terrorist financing, and rules to strengthen ethics standards.
She emphasized the importance of protecting consumers, stating that existing state laws and legal rights for consumers need to be maintained.
As a researcher studying illicit finance, I’ve found Senator Gillibrand raises a key point: the current regulations just aren’t designed for the crypto world. The rules we have now were built with traditional banks and money transfer services in mind, and crypto platforms and assets function in a completely different way, making it hard to apply those same rules effectively.
“These aren’t banks; they are not money transmitters. They’re different,” she said.
She also explained that the industry needs to be involved in creating the tools law enforcement can use to address threats from criminals or hostile groups using digital assets.
Banking rewards compromise appears settled
Senator Gillibrand suggested that a controversial part of the cryptocurrency discussion – a proposal about banking rewards – might be resolved, and no longer a point of contention.
When asked if the agreement on banking rewards was final, Senator Gillibrand stated she believed there was an understanding, and it might continue simply because all parties involved are dissatisfied with the current situation.
She felt they’d reached a solution where everyone had to give a little, but she believed it would ultimately be successful. “I think we can consider this settled,” she said.
Banks and cryptocurrency companies are clashing over rewards offered on stablecoins. Banks are concerned these rewards could be seen as a form of interest paid on deposits, while crypto firms believe strict rules would limit access for users and stifle competition.
CLARITY Act could reach vote before August recess
Senator Gillibrand stated that the final three problems must be fixed right away to ensure the bill stays on track.
She stated that these three problems need to be resolved within the next week, emphasizing the urgency of completing them this week.
If negotiators come to an agreement, a Senate Banking Committee review of the bill is expected within about a week. Senator Tim Scott, the committee’s chairman, has also expressed hope for a bipartisan review in May, stating that lawmakers are nearing a deal on the CLARITY Act.
Once the banking legislation is finalized, Senator Gillibrand explained that lawmakers need to work with the Senate Agriculture Committee to merge it with their draft bill. The Senate Banking Committee has presented the CLARITY Act as a bill to create a framework for digital asset markets, aiming to protect investors, provide tools for law enforcement, and encourage responsible innovation.
Senator Gillibrand stated that if those three requirements are met, a vote could be held, potentially before the Senate’s August break.
When asked if the bill could pass if three key issues were addressed, Senator Gillibrand stated simply, “Yes. If we can agree on those three things – including the ethics clause – we’ll have enough votes. Otherwise, we won’t.”
House path could move quickly if Senate passes bill
Senator Gillibrand believes the House will likely consider the bill if it passes the Senate.
Senators involved in negotiations have been collaborating with Representative French Hill, the chair of the House Financial Services Committee, and ranking member Maxine Waters. They’ve been exchanging drafts and incorporating feedback from both of them. Waters is the leading Democrat on the committee, and Hill is its chair.
Gillibrand believes people will be pleased with it and expects they’ll give it their approval.
When asked when a deal might be reached, Senator Gillibrand said she hoped it would happen in the first week of August, but realistically, it might not be until September.
The recent feedback provides the crypto industry with a more definite timeline for legislation. They need to finalize agreements on ethics, consumer safeguards, and preventing illegal activity now, or they risk delaying broader market regulations until after the election.
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2026-05-06 18:32