Trump stalls CLARITY Act as ethics dispute threatens Senate vote

The CLARITY Act’s chance of becoming law in 2026 has fallen to 31% on Polymarket as the White House withholds support for a disputed ethics provision.

Crypto In America reported that the White House had not approved the ethics language as of July 20, despite President Donald Trump meeting Republican senators last week to discuss the crypto market structure bill. Sources cited by the outlet also said the administration has not explained which ethical limits it would accept.

Without a clear position from the White House, Senate negotiators may need more time to prepare an updated version of the legislation, according to the report. The delay could disrupt Republican plans to bring the CLARITY Act to the Senate floor before lawmakers leave Washington for their August recess.

Senate Majority Leader John Thune wants to schedule a floor vote before August, but he has acknowledged that Republicans have not secured a bipartisan agreement. Under Senate rules, the party would need Democratic support to overcome procedural barriers and advance the legislation.

Democrats have demanded restrictions on elected officials’ involvement in digital assets, with their concerns focused mainly on Trump’s crypto interests. According to the president’s financial disclosure, his digital-asset ventures generated as much as $1.4 billion in income last year.

Senator Elizabeth Warren has also requested an updated financial disclosure from Trump. As previously reported by crypto.news, Warren argued that senators need the document while considering ethics rules for the crypto legislation.

The dispute has begun to weigh on market expectations. Polymarket traders now assign a 31% probability that Trump will sign the CLARITY Act into law this year, placing the contract near its lowest level since the prediction market opened.

Ethics rules have become the main barrier

Democratic senators have accused Republicans of keeping them outside recent talks over the ethics provision, according to Crypto In America. Their complaints included the White House meeting last week, which reportedly involved Trump and Republican lawmakers but no Democratic negotiators.

Although Trump met senators to discuss the legislation, the White House has not told negotiators what restrictions the president would support, sources told the outlet. The lack of guidance leaves lawmakers without agreed language for separating public duties from private crypto interests.

Warren and other Democrats have linked their demand to Trump’s financial ties to the industry. Their proposed safeguards seek to limit the ability of presidents and other senior officials to profit from digital-asset businesses while shaping federal crypto policy.

Republicans must decide whether to accept an ethics provision strong enough to attract Democratic votes without losing support from Trump or members of their own party. Thune’s comments show that the Senate does not yet have the cross-party deal needed to proceed, while the approaching recess leaves negotiators with little time to settle the dispute.

The House has already passed its version of the CLARITY Act, but the Senate must approve its own text before the legislation can reach Trump’s desk. Any differences between the two versions would also need to be resolved and approved by both chambers, adding further steps to an already compressed timetable.

For crypto companies, the bill is intended to establish clearer federal oversight by defining the roles of the Securities and Exchange Commission and the Commodity Futures Trading Commission. Its delayed progress leaves those proposed rules tied to negotiations over presidential ethics and decentralized finance.

DeFi protections remain another source of conflict

Alongside the ethics debate, the Blockchain Regulatory Certainty Act has continued to divide supporters of the CLARITY Act and law enforcement groups. The BRCA language would protect developers of decentralized protocols from being held responsible for activity carried out by their users.

Under the provision, qualifying developers would not automatically be treated as money transmitters merely because they created or maintained decentralized software. Industry groups view that protection as necessary for developers who do not hold customer assets or control transactions.

Law enforcement organizations have taken the opposite position, arguing that the proposal could make investigations into illicit finance more difficult. Their objections have added another contested issue for senators preparing the revised market structure bill.

Blockchain Association CEO Summer Mersinger expects the BRCA protections to survive the Senate negotiations. Speaking to Crypto In America, Mersinger indicated that she believes lawmakers will keep the provision intact when they publish the updated text.

Mersinger has also predicted that the Senate could hold a floor vote this week, as previously reported by crypto.news. Despite concerns about whether the measure can attract enough votes, she expressed confidence that lawmakers could still move it through the chamber.

Thune’s admission that no bipartisan agreement exists, however, shows that a vote depends on negotiators resolving more than the DeFi language. According to Crypto In America’s reporting, the White House’s undecided position on ethics remains the immediate obstacle to releasing the next bill text.

With the August recess approaching, Senate leaders face a narrowing window to settle both disputes, publish revised language and build the coalition required for a floor vote. Polymarket’s 31% probability indicates that traders currently see those unresolved negotiations as a substantial threat to the bill becoming law this year.