Regulation
CLARITY Act Odds Drop to 37% as Senate Delays Crypto Vote
The CLARITY Act vote slips past the Senate's 8 August recess as Russia sanctions take priority. Here's what the delay means for crypto markets.
8h ago 4,280
BLOCKINSIDERLoadingThe CLARITY Act vote slips past the Senate's 8 August recess as Russia sanctions take priority. Here's what the delay means for crypto markets.
Crypto's most important bill seems to be stuck once again. The CLARITY Act was expected to reach the Senate floor before the summer recess and become the first comprehensive US crypto market structure law. Instead, Senate leadership has pushed it down the calendar, making passage before 8 August increasingly unlikely, and the market noticed.
Crypto lawyer John E. Deaton, who represented XRP holders during Ripple's legal battle with the Securities and Exchange Commission (SEC), believes the delay is driven more by politics than policy. He argues President Donald Trump will keep earning from crypto whether the legislation passes or not.
Senate Majority Leader John Thune postponed consideration of the bill this week to prioritize a Russia sanctions package and a bundle of federal nominations. The sanctions legislation carries added weight in the chamber: it is dedicated to the memory of Senator Lindsey Graham, who died Monday, and his memorial services occupied the Senate floor through midweek.
The Senate typically moves one major contested bill at a time, and Thune has acknowledged that finishing both the crypto bill and a separate college sports bill before the recess is unlikely. He has also pointed to unresolved "swirl" around the bill, including bank lobbying over stablecoin yield.
If no vote lands before the recess begins on 8 August, the legislation returns in September to a crowded calendar of government funding fights and midterm politics.
Deaton dismissed claims that Democratic opposition is primarily about ethics. In a recent post on X, he argued that the real objective is preventing Trump from claiming a legislative victory before the midterm elections.
Although Deaton has repeatedly said he is not a Trump supporter, he believes the debate has become more political than policy-driven.
Trump has already earned an estimated $1.4 billion from crypto ventures without the CLARITY Act becoming law. According to his 2025 financial disclosure, most of it is from royalties tied to the TRUMP memecoin and token sales linked to World Liberty Financial.
According to Deaton, that income will continue regardless of whether Congress approves or rejects the legislation.
The biggest obstacle to the CLARITY Act is a dispute over conflict-of-interest provisions. Democrats want the legislation to prevent sitting government officials, including the president and their immediate families, from issuing or profiting from digital assets while in office.
Although Trump reportedly agreed to a compromise proposal last week, Democratic lawmakers argue the revised language remains too weak and would not prevent future conflicts after a president leaves office.
The debate intensified after Trump's financial disclosure revealed roughly $1.4 billion in crypto-related income. Most of that came from royalties tied to the $TRUMP memecoin and token sales linked to World Liberty Financial.
Among the bill's critics is Sen. Jeff Merkley, who said Trump's crypto activities represent "a swamp of corruption that is a mile deep and a mile wide."
Merkley has been joined by Sen. Chris Murphy, Sen. Chris Van Hollen, Sen. Elizabeth Warren, and several pro-crypto Democrats who believe the current draft does not adequately address ethics concerns.
The Senate delay weighed on the overall crypto market. Bitcoin (BTC) fell nearly 3% on 28 July, slipping below $65,000 and briefly trading around $63,000. Ethereum (ETH) dropped nearly 4% to around $1,873, while XRP dropped to roughly $1.05.
Prediction markets also showed weaker confidence. The estimated probability of the legislation becoming law in 2026 dropped into the mid-30% range, well below levels seen earlier this year.
However, the CLARITY Act was not the only factor affecting sentiment. The Federal Reserve was also scheduled to meet during the week and prompted investors to prepare for the possibility of higher interest rates for longer.
At the same time, weakness in AI-related technology stocks contributed to a broader risk-off environment across financial markets.
Missing the August deadline does not end the CLARITY Act's chances of becoming law. It does, however, make the legislative path more challenging.
When lawmakers return in September, crypto legislation will compete with government funding bills, other legislative priorities, and the approaching midterm election cycle.
If Congress fails to act this fall, some policy analysts believe comprehensive crypto market structure legislation could be delayed until 2027 or later.
Even so, many parts of the digital asset industry continue moving forward. Large financial institutions and payment companies are expanding tokenized deposit networks and stablecoin initiatives despite ongoing regulatory uncertainty.
Other jurisdictions are also moving ahead with clearer crypto rules. This increased pressure on U.S. lawmakers to establish a competitive regulatory framework.
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