The CLARITY Act, a pivotal bill designed to establish clear federal rules for digital assets, is stalled in the U.S. Senate as a bitter ethics dispute over President Donald Trump’s crypto holdings dramatically cuts its chances of passage. Polymarket traders have lowered the odds of the bill becoming law in 2026 to just 37%, down from higher levels earlier this year, reflecting a growing fear that the window for action is closing before Congress’s August recess.
The bill has already cleared the House and the Senate Banking Committee, but it has yet to receive a floor vote. The primary obstacle is no longer the market-structure framework itself but an ethics amendment pushed by Democrats, led by Senator Elizabeth Warren. They are demanding enforceable restrictions that would prevent senior government officials—including the president—from profiting financially from the digital asset industry they help regulate. Republicans, however, have resisted language specifically targeting Trump’s crypto ventures, warning that such provisions could torpedo the bipartisan support needed to advance the legislation.
The clash was fueled by Trump’s latest financial disclosure, which revealed roughly $1.4 billion in crypto-related income. This included about $594 million tied to World Liberty Financial and approximately $635 million linked to the TRUMP meme coin venture. Democrats argue that these enormous sums present an obvious conflict of interest, insisting that ethics safeguards must accompany any new market rules. As a result, the Senate math has become treacherous: with most legislation requiring 60 votes to overcome a filibuster, Republicans need at least seven Democratic senators to move the bill forward, a threshold they cannot reach without concessions on ethics.
Time is also a critical factor. Senate leaders have only a limited number of legislative days before the August recess, and other priorities—such as appropriations bills and nominations—are eating up floor time. If the CLARITY Act misses this window, its path could become even harder later in the year as Congress pivots to government funding deadlines. Supporters acknowledge that every delay strengthens the political headwinds.
While Bitcoin has already secured spot ETFs and institutional custody, the stalled bill leaves decentralized finance, Layer-2 networks, yield-bearing stablecoins, and newer altcoin projects in regulatory limbo. Treasury Secretary Scott Bessent has renewed calls for a comprehensive federal framework, and the CFTC is weighing domestic perpetual crypto futures—moves that could reshape liquidity and price discovery. In the background, Standard Chartered has started accepting BlackRock’s tokenized U.S. Treasuries as collateral through OKX, underscoring how institutional innovation is outpacing the legislative machinery meant to govern it. For many altcoins and emerging deployments, the fallout may be severe if Congress fails to act before the recess.
