Clarity Act on the Ropes as Ethics Fight and Shrinking Calendar Threaten Passage

The Clarity Act, the sweeping bill that would set the ground rules for U.S. crypto markets, is running low on both time and votes, with Senate leadership now signaling it likely won’t clear the chamber before lawmakers scatter for their August recess.

Senate Majority Leader John Thune told reporters on Thursday he doesn’t expect the digital-asset market-structure bill to find enough runway before the summer break, though he said he still hopes to begin the floor process beforehand. Missing that window is a serious setback: With midterm campaigning set to dominate the fall, dragging the vote into September sharply dims its odds of becoming law this year.

The immediate roadblock is ethics. Republicans on Wednesday released updated 616-page text that would bar federal officials, including the president, from issuing or sponsoring digital assets, with enforcement handed solely to the Justice Department. Democrats whose votes are needed to reach the 60-vote threshold rejected it.

Sen. Ruben Gallego, one of only two Democrats to back the bill in committee, told Politico the GOP offer was not a serious effort after months of bipartisan work, and vowed to send back counter-language. Gallego is now working with Sen. Thom Tillis, who called the White House-backed package a step in the right direction but conditioned his support on stronger guardrails against officials profiting from crypto.

Roughly seven Democrats, among them Angela Alsobrooks, Mark Warner and Catherine Cortez Masto, say they can’t support the current draft, citing gaps on ethics and illicit finance, Crypto in America reported. Bipartisan talks are expected to run through the weekend.

The industry is leaning hard on leadership to move anyway. The Digital Chamber, Crypto Council for Innovation and Blockchain Association urged Thune and Minority Leader Chuck Schumer in a joint letter to start floor consideration even as negotiations continue, arguing there is no substitute for durable market-structure law.

Solana Institute President and former Blockchain Association CEO Kristin Smith in a post on X today countered Majority Leader Thune’s framing of the timing concerns heading into the August recess: “I’ve had many conversations since this came out yesterday, and it doesn’t reflect the current state of play,” she posted. “There is a clear path to pass the Clarity Act before the recess on August 7—and we must seize it.”

The Clarity Act, if passed and signed into law, would formally legalize most cryptocurrency activity in the United States. Principally, it draws jurisdictional lines for regulators in the SEC and CFTC, placing most crypto assets outside the hands of the SEC and into the CFTC’s purview. Thornier issues concern ongoing debate over so-called stablecoin yield—the practice of crypto platforms like Coinbase offering rewards to clients for holding dollar-based tokens in accounts—and the ongoing fight to curb conflicts of interest among public officials, namely President Donald Trump and his many crypto ventures.

As the clock ticks away, though, the odds that the crypto industry gets its long-awaited market structure bill continue to shrink.

Prediction markets and analysts have grown gloomier. Galaxy Research, which has steadily trimmed its forecast as the calendar tightened, now frames passage as requiring a last-ditch effort, while betting markets peg the odds well below even.

Complicating the timeline further, the funeral of Sen. Lindsey Graham, expected to draw many Senate Republicans early next week, could scramble the schedule and leave the timing of any procedural vote uncertain.