The Digital Asset Market Clarity Act, or CLARITY Act, has lost momentum in the U.S. Senate. Senate Majority Leader John Thune said the bill is unlikely to be finished before the August recess, with the chamber reserving limited floor time for other priorities.
That stance cuts against earlier market expectations that the measure could pass in August. People involved in industry and congressional negotiations had viewed Aug. 7 as a key deadline if the bill was to retain a reasonable chance of passing in 2026.
Aug. 7 had been treated as a critical deadline
Speaking to reporters on July 23, Thune said, “I don’t think we can get these done.” With the Senate not giving the bill immediate priority, the odds of completing the legislative process before the August recess have weakened.
On prediction market Polymarket, the chance of the bill passing this year has fallen from above 80% at the start of the year to about 37%.
Ethics language remains the central sticking point
The delay still comes down to unresolved disputes over ethics provisions. Democrats have tied their support to conflict-of-interest rules, with attention focused on more than $2 billion in benefits linked to the Trump family’s crypto-related business interests.
Republicans have put forward a new draft that includes ethics language, but critics say the proposal leaves obvious loopholes.
Letitia James files written opposition
New York Attorney General Letitia James submitted written testimony to the Senate Permanent Subcommittee on Investigations on July 27 opposing the bill.
She said the CLARITY Act would override state regulation of digital asset markets and transfer oversight to the U.S. Commodity Futures Trading Commission, or CFTC, weakening enforcement by state and local authorities.
James also said her office has seen crypto fraud complaints triple over the past three years, while reported losses over five years have approached $500 million.