The Clarity Act risks failing in the US Senate, since 7 August is the last session day before the recess. Majority Leader John Thune has not yet scheduled a cloture vote. Meanwhile, ethics rules for Trump's crypto business and law enforcement concerns remain unresolved.
The Clarity Act, formally the Digital Asset Market Clarity Act, would regulate the US crypto industry at federal level. So far, no comprehensive federal framework exists. The Commodity Futures Trading Commission (CFTC) would oversee digital commodities, while securities would remain with the SEC. The House of Representatives originally passed the bill in July 2025 by 294 to 134 votes. In the Senate, the Agriculture Committee moved its portion through in January 2026. Subsequently, the Banking Committee followed in May, 15 to 9. On the floor, however, the filibuster pushes the bar to 60 votes. TD Cowen analyst Jaret Seiberg recently put the gap at around ten votes.
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Trump's crypto business weighs on the ethics compromise
One of the main points of contention concerns the president's own crypto holdings. In late July, Senators Ruben Gallego (D-Ariz.) and Thom Tillis (R-N.C.) therefore sent an ethics compromise to the White House. The proposal would bar officeholders and their spouses from issuing or sponsoring digital assets. Other family members fall outside the draft. The Justice Department would enforce the rule, and state attorneys general would additionally hold their own authority. A sunset clause would finally let the restrictions expire in January 2029.
The timing stands out, since it coincides with the end of the current term. After January 2029, no new cases could be brought. Trump had agreed to a narrower version of that rule. Bringing in state attorneys general goes further, though, and creates a second enforcement layer outside the federal government. The rule would then hit a president whose circle is itself active in the crypto business. Financial disclosures from June 2026 showed payments in the millions. Trump received these in connection with the crypto company World Liberty Financial.
The White House did not initially respond to a request about the ethics question. For Democrats, the ethics clause at the same time forms the precondition. Only afterwards does the caucus negotiate the actual market structure. Senator Elizabeth Warren (D-Mass.) presented a fact sheet in the same week. In it, she criticizes above all Trump's ability to profit from his own crypto dealings. Furthermore, she cites inadequate investor and consumer protection. One Democratic Senate aide nevertheless considers White House approval unnecessary.
"Honestly, we don't need the White House for it to pass the Senate." - Democratic Senate aide
Law enforcement warns of gaps in money laundering controls
The second point of contention concerns illicit finance. Specifically, that covers money laundering, terrorist financing and sanctions evasion. Senator Catherine Cortez Masto (D-Nevada) has repeatedly argued against the draft in its current form. The Clarity Act, she says, does not go far enough on law enforcement and consumer protection. Moreover, her vote counts among those Republicans need for the 60-vote threshold.
The National Sheriffs' Association, which represents US sheriffs, argues along the same lines. In particular, it criticizes overly broad exemptions in money laundering rules, sanctions law and know-your-customer requirements. The latter require financial service providers to identify their customers and report suspicious transactions. As the association reads it, investigators therefore lose leads when crypto service providers partly fall outside this regime.
Warren's fact sheet likewise names loopholes that would make it easier for criminals to abuse digital assets. The objections of law enforcement and lawmakers thus overlap at the same point in the draft. Unlike the ethics clause, this concerns the statutory text itself. Any fix consequently touches the core of the bill, not just an accompanying clause.
The Clarity Act still lacks around ten Senate votes for cloture
The real hurdle is cloture. With this procedural vote, the Senate ends debate, and only afterwards comes the vote on substance. Without it, a minority can hold up the bill almost indefinitely through a filibuster. So the threshold requires 60 votes, which means Republicans need around seven Democratic commitments. By Seiberg's estimate, secured votes recently stood around ten below that mark. Thune had promised a vote before the recess, yet he had not filed the necessary motion by midweek.
A third negotiating track runs in parallel through the Senate Agriculture Committee. Because the bill touches securities and commodities oversight at once, two committees in the chamber worked on their own versions. Senator Cory Booker (D-N.J.) now leads the talks on how the agriculture text folds into the overall bill. The committee had already passed its version in January 2026, though without a single Democratic vote. The caucuses still negotiate over its integration.
A Democratic Senate aide described the state of talks as a "standstill". Specifically, he named ethics, illicit finance and the agriculture committee text as open items. Overall, the same source summed up the situation: "We're all kind of waiting to see what will happen." As a realistic window, the aide ultimately named September, provided the contested points can be settled by then. Summer Mersinger, CEO of the advocacy group Blockchain Association, nevertheless sounds optimistic about the bipartisan talks.
Without passage, only a revocable interpretive guideline remains
After 7 August, the Senate pauses for a month. When the chamber returns, little time remains before the November elections. Political attention shifts later to the campaign, which narrows the window for a law of this scale.
The House had passed the bill in July 2025 during the so-called Crypto Week. The vote came directly after the GENIUS Act, the stablecoin law. Alongside the Republicans present, 78 Democrats voted in favor at the time, but that tailwind is missing in the Senate. Its predecessor FIT21 did clear the House in an earlier Congress, yet then stalled in the Senate. The FTX collapse and resistance to curbing SEC jurisdiction contributed to that failure. Central structural elements of that draft still stand in the Clarity Act today. Among them are the classification into "digital commodities" and "investment contract assets", as well as the expansion of CFTC powers.
What hangs on the outcome is the supervisory architecture for the entire US crypto market. The CFTC would gain exclusive jurisdiction over spot and cash markets for digital commodities. Securities, however, would stay with the SEC. In addition, stablecoins would fall under shared oversight by both agencies. Without passage, the main regulatory anchor would be a joint interpretive guideline from the SEC and CFTC dated March 2026. That guideline replaced the SEC framework from 2019 and now governs the classification of digital assets. As an administrative measure, it binds no future administration. New agency leadership could consequently scrap the guideline at any time.
