Punts

The U.S. Senate will not vote on the Clarity Act before its August recess, pushing the crypto market structure bill to September and into the closing weeks before midterm campaigning consumes the calendar.

Senate Majority Leader John Thune (R-SD) confirmed the delay late Thursday. “The Dems are insistent on no Clarity vote,” he said in remarks posted by his press office, adding that he had worked with the bill’s sponsors and that Senator Cynthia Lummis (R-WY) “was great, and we’re getting that queued up first thing when we come back.”

The chamber leaves Friday and returns in mid-September for a few weeks before attention shifts to November’s elections, making that window the last realistic one this year. A source familiar with the matter told The Block that Senate Democrats were reluctant to vote ahead of the midterms given the crypto industry’s growing political influence, and that the delay buys time to assemble the 60 votes needed.

That math has not changed since the bill cleared the Senate Banking Committee 15-9 in May, when only two Democrats crossed, Ruben Gallego (D-AZ) and Angela Alsobrooks (D-MD). Roughly six are needed on the floor. Republican support has also wavered. Should the bill clear the Senate, it would return to the House for another vote before reaching President Donald Trump.

Ethics remains the roadblock

The sticking points are the same ones that have dogged the bill all year: stablecoin rewards, whether the bill arms law enforcement adequately against illicit finance, and above all the ethics provisions covering Trump’s own crypto holdings.

Those provisions could pay him. An addendum negotiated by Senators Thom Tillis (R-NC) and Gallego, still unreleased and being worked out with the White House, would require the president to divest from crypto-related businesses. Forced divestiture would also let him defer federal capital gains tax on those holdings, potentially for years, Bloomberg reported, and if he held the replacement investments until death the gains would escape tax entirely.

Trump reported $1.4 billion in crypto and meme coin earnings for 2025, and holds a 38% stake in World Liberty Financial through an affiliated company. Without deferral he would face a 20% rate. Commerce Secretary Howard Lutnick and Treasury Secretary Scott Bessent have both used the same provision on their own divestments.

The addendum would also let state attorneys general sue to enforce the ethics measures where the Justice Department declines to. Whether Trump accepts it is unresolved.

Decrypt reported two weeks ago that the bill was on the ropes, with Thune already signalling it would not clear the chamber before the break. Galaxy Research cut its odds of passage this year to a coin toss in June.

Industry groups struck a determined tone, with Crypto Council for Innovation CEO Ji Hun Kim noting the postponement was disappointing but the direction unchanged. Every day without a framework “pushes American users and builders offshore and leaves consumers at risk,” Kim said in a statement.

There is a fallback should the Clarity Act falter. SEC Chair Paul Atkins said last month the agency is ready to write crypto rules itself if the legislation stalls, an outcome the industry has resisted because regulation by rulemaking can be undone by the next administration.