CLARITY Act Stalled in Senate: US Crypto Future at Risk

The figure of 29 percent has become the new benchmark for anyone awaiting regulatory certainty for cryptocurrency in the United States. 

That is the probability displayed by the prediction market Polymarket for the chance of the CLARITY Act passing in 2026, plunging from levels above 60 percent that had held for several months earlier. 

This sharp decline occurred precisely when the US Senate decided to postpone discussion of the CLARITY Act ahead of the August recess, due to unresolved ethics provisions that have yet to find common ground between Republicans and Democrat s. 

For the US crypto industry, this delay is widely expected to end the tug-of-war over authority between the SEC and CFTC, while providing legal certainty for exchanges, DeFi projects, and new token issuers. As that certainty slips further from reach, the market has begun to react.

Key Takeaways

• The US Senate postponed discussion of the CLARITY Act ahead of the August 2026 recess due to unresolved ethics provisions.
• Although Lummis recorded more than 100 bipartisan compromises, seven Democratic Senators still rejected the latest draft over concerns about Trump’s crypto holdings valued at $1.4–2.3 billion.
• The odds of the CLARITY Act being passed in 2026 on Polymarket have plunged to 29 percent, down 36 percent from previous levels above 60 percent.

Ethics Dispute Blocks CLARITY Act in US Senate

The Senate Banking Committee had actually already advanced the CLARITY Act on May 14, 2026, with a 15-9 vote reflecting bipartisan support. 

The bill is designed to answer the major question that has long hung over the industry: when a digital asset platform can be considered decentralized, and who has the authority to regulate it—the SEC or the CFTC. 

According to Senator Cynthia Lummis, the latest draft of the bill now exceeds 600 pages, the result of months of marathon revisions. In a statement on X, Lummis detailed that more than 100 bipartisan compromises have been incorporated into the text. 

Title I alone contains 33 inputs from Democrats, plus 23 new provisions on preventing illicit financing, more than 30 changes related to CFTC authority, and three additional titles born from negotiations between both sides.

Read Also: Polymarket and the Best Telegram Bots: A Guide to Crypto Market Prediction

The section drawing the most attention is ethics. Lummis explained that the bill would prohibit the president, vice president, members of Congress, federal judges, and their spouses from issuing or sponsoring digital assets for personal gain. 

President Donald Trump himself is reported to have agreed to place his digital assets into a blind trust or divest them entirely. 

The bill also grants the Attorney General authority to pursue civil actions against violators, complete with financial sanctions for both officials and non-compliant exchanges.

However, even these extensive revisions have not been enough to convince all parties. On July 22–23, seven Democratic Senators rejected the latest CLARITY Act draft, with Chris Murphy, Chris Van Hollen, and Jeff Merkley as the main drivers of the opposition. 

Their reasoning has been consistent: the current ethics language is considered insufficient to prevent Trump and his family from profiting from crypto holdings estimated at between $1.4 billion and $2.3 billion, according to a report by The Coin Republic.

Sign up at Bittime with a fast, secure, and easy process so you can trade futures!

Passage Odds Grow Slimmer as Polymarket Records Sharp Drop

The firm stance of the seven Democratic Senators immediately impacted market sentiment. Data from Polymarket shows the probability of the CLARITY Act being enacted into law in 2026 is now just 29 percent, plunging 36 percent from its previous position above 60 percent earlier in the year. 

Market analyst James E. Thorne has a different view on the root of the problem. In a post on X, he argued that opposition to the bill reflects political rivalry more than substantive policy differences. 

Read Also: Understanding the CLARITY Act and Its Impact on DeFi Developers in the United States

Thorne also cited the view of Treasury Secretary Scott Bessent, who called clear regulatory standards essentially a national strategy to attract capital, talent, and innovation. According to Thorne, blocking this bill will not stop the progress of crypto—it will only move the business to other countries that already offer greater regulatory certainty. 

This argument is not without foundation. As long as the Senate remains entangled in internal ethics disputes, US crypto industry players must face the same uncertainty as in previous years: exchanges still do not know for certain which rules apply, new token projects delay expansion, and both capital and talent have strong reasons to look toward jurisdictions with more mature regulations.

Read Also: AI Predicts XRP Price If Clarity Act Fails: Sideways or Collapse? 

Conclusion

The CLARITY Act still holds significant potential to end the regulatory chaos surrounding crypto in the United States, but the path to its passage is now far steeper than initially expected. The bipartisan compromises crafted by Lummis are ambitious, yet the ethics dispute surrounding Trump’s crypto holdings has proven to be a stubborn obstacle that cannot be easily dismissed. 

With the Senate entering its August recess and odds on Polymarket continuing to decline, the direction of this bill will depend heavily on how quickly both sides can agree on ethics language that satisfies all parties. 

What is clear is that until that certainty arrives, the global crypto industry—including market participants in Indonesia watching the direction of regulation in the land of Uncle Sam—must still wait patiently for the next chapter of this legislative drama.

Check the price of Bitcoin (BTC), Ethereum (ETH), XRP, Solana (SOL), GRAM, and BNB as well as top memecoins like DOGE. You can trade directly on Bittime!

Bittime is a Digital Financial Asset Trader (PAKD) platform licensed and supervised by the Financial Services Authority — where you can buy Bitcoin in Indonesia and hundreds of other crypto assets starting from Rp10,000. Registration is fast, secure, and can be started today.

Monitor the conversion of USDT to IDR and the price movements of your favorite crypto assets in real time. Everything is available in one crypto investment app that can be downloaded for free on the Play Store.

Ready to start? Register now at Bittime and execute your investment strategy with a platform already trusted by millions of users in Indonesia.

FAQ

What is the CLARITY Act? 

The CLARITY Act is a proposed digital asset market structure bill in the United States that defines when a crypto platform is considered decentralized. The bill also clarifies the division of regulatory authority between the SEC and the CFTC.

Why is the CLARITY Act delayed in the US Senate? 

The delay is due to unresolved ethics provisions, particularly regarding potential conflicts of interest from President Trump’s crypto holdings. Seven Democratic Senators rejected the latest draft on July 22–23, 2026, for this reason.

What are the odds of the CLARITY Act being passed in 2026? 

According to Polymarket data, the odds of the CLARITY Act being passed in 2026 currently stand at 29 percent. This figure is down 36 percent from previous levels that had been above 60 percent.

What are the ethics provisions in the CLARITY Act? 

These provisions prohibit the president, vice president, members of Congress, federal judges, and their spouses from issuing or sponsoring digital assets for personal gain. The bill also grants the Attorney General authority to pursue civil actions against violations, with financial sanctions.

What is the impact of the CLARITY Act delay on the crypto industry? 

The delay prolongs regulatory uncertainty for exchanges, DeFi projects, and token issuers in the United States. This uncertainty also risks pushing capital and talent in the crypto industry toward other jurisdictions with clearer rules.