Trump’s crypto gains have become a major hurdle to passage of the CLARITY Act.NurPhoto via Getty ImagesTime is running out for the crypto industry’s landmark bill — and with it, the industry's best chance at a law that outlasts this administration.The Digital Asset Market Clarity Act, or CLARITY, would create a federal rulebook for issuing, trading and holding digital assets, dividing oversight between the Securities and Exchange Commission and the Commodity Futures Trading Commission, setting standards for exchanges and other intermediaries, and defining how decentralized-finance developers and protocols would be treated. Backers call it a test of whether the next generation of trading, payments and capital formation gets built in the United States or in jurisdictions with clearer rules.The immediate obstacle is arithmetic. The bill needs 60 votes; Republicans hold 53 seats. That leaves its sponsors hunting at least seven Democrats, and they have not found them. The clock is tighter than the calendar suggests. CLARITY did not appear on the Senate’s schedule Monday, when the chamber's only roll-call vote was on a continuing resolution to fund the government. No cloture motion has been filed on the bill. Under the Senate's ordinary rules, a filing Wednesday would produce a vote Friday, the last scheduled day before the recess — and that vote would only end debate on the motion to proceed, not pass anything.Last month, Majority leader John Thune said that he did not expect the bill to clear the chamber before the recess, though he said he hoped to begin the floor process. White House crypto adviser Patrick Witt said he was more optimistic, pointing to the Senate’s session days in early August. Prediction markets are less equivocal: Polymarket puts the odds of enactment this year near 30%, down from 82% in February. Galaxy Research has landed in the same place."It does seem like CLARITY may be dead in the water because after the summer recess, the focus is going to be on the midterms and not on trying to get a complicated bill like CLARITY passed," says Ladan Stewart, global head of fintech at White & Case and former lead of the SEC’s specialized crypto trial unit.The Senate leaves Washington at the end of this week and does not return until Sept. 14, leaving about three weeks before lawmakers scatter again in early October and stay away through Election Day. When they come back in November, barely five session weeks remain before year-end, with annual spending bills and other must-pass measures competing for floor time.And if Democrats take the House, Stewart adds, CLARITY is unlikely to pass at all during the remainder of Trump's term. That would leave the industry where it sits today: dependent on crypto-friendly regulators.The Trump administration has reversed much of the Biden-era enforcement campaign, ending or seeking to resolve major cases involving Coinbase, Gemini and Ripple and issuing guidance that gives crypto firms more room to operate. But those changes rest on agency interpretations and enforcement discretion, which a future administration could undo. CLARITY would put the broad boundaries in statute.The legislation has already gone further than any previous attempt to establish a comprehensive U.S. crypto framework. The House passed CLARITY in July 2025 by a vote of 294 to 134, with 78 Democrats joining every Republican who voted. In May, the Senate Banking Committee advanced its version 15 to 9, with Democratic Sens. Angela Alsobrooks of Maryland and Ruben Gallego of Arizona voting in favor.Crypto companies spent heavily to get this far. Fairshake, a crypto-backed super PAC, and its affiliates poured more than $130 million into the 2024 elections, supporting candidates from both parties. The network said in January that it had more than $193 million in cash on hand for the midterms, including a $25 million contribution from Coinbase in 2025 and more recent contributions of $25 million from Ripple and $24 million from Andreessen Horowitz's crypto arm.Money, however, cannot supply the missing votes. Any prospect of assembling them dimmed on July 22, when Republicans released a new draft combining the work of the Senate Banking and Agriculture committees. Within hours, seven Democrats said the text still fell short, calling for stronger provisions on ethics, consumer protection, illicit finance, conflicts of interest and market integrity, while making clear they would keep negotiating.Ethics has become the most politically difficult of those disputes, largely because of Trump's own crypto businesses, which seem to brazenly ignore historical norms regarding conflicts of interest. His latest financial disclosure reported more than $1.4 billion in crypto-related income for 2025, including $636 million tied to licensing the $TRUMP memecoin and more than $500 million from sales of World Liberty Financial tokens.For many who bought the president's memecoin, the trade went the other way. Blockchain analytics firm Nansen estimates that 988,905 wallets — about two-thirds of all wallets that had bought $TRUMP — were down a combined $3.81 billion through June, counting both realized and paper losses. The Republican draft would bar the president, vice president, members of Congress, senior federal employees and judges — and their spouses — from issuing or sponsoring a digital asset for compensation while in office. But the prohibition would apply prospectively (not to ventures launched before it becomes law), be enforced only by the attorney general and expire on Jan. 20, 2029. It would not prevent officials from holding digital assets as investments, and it includes a safe harbor for certain preexisting ventures after divestment or placement in a qualified blind trust. Democrats say those limits, along with exceptions for licensing arrangements and other family members, would leave much of Trump's crypto business beyond its reach. Negotiators worked through last week on a revised ethics compromise. No agreement had emerged by Monday.For Democrats, says Jake Chervinsky, founder and chief executive of the Hyperliquid Policy Center, a Washington nonprofit funded by the Hyper Foundation to advocate for decentralized finance, the calculation is less about what the bill contains than about how they would defend a yes vote at home. "The more negative sentiment there is toward crypto by virtue of the president's involvement in the industry," he says, "the harder it is for Senate Democrats to take that yes vote and then go home to their constituents and defend it."Trump's businesses are not the bill's only complication. Banks and crypto platforms have spent months fighting over stablecoin rewards. Banks argue that payments for simply holding stablecoins resemble interest and could pull deposits from traditional lenders. Crypto companies say a broad ban would insulate banks from competition. A compromise negotiated in May would prohibit rewards paid solely for holding a stablecoin, or programs economically equivalent to bank interest, while preserving bona fide incentives tied to transactions, loyalty programs and other activity, subject to future rulemaking. It helped the bill clear the Banking Committee and carried into the combined text.If the bill fails, the first response may come from the markets. Equity research and brokerage firm Bernstein told clients Monday that digital assets would likely fall further if the bill dies this year, though it expects the drop to be short-lived. With Congress stalled, it argues, the SEC and CFTC will simply move faster on their own.There are still optimists. "In my experience in D.C., a bill is dead when people leave," says Peter Curley, head of global regulatory affairs at tokenization firm Ondo Finance and a former SEC and Treasury Department official. "There are still a lot of people around who care about it and are spending a lot of time on it."Curley believes the legislative window remains open through the end of the year, leaving room for an agreement in September or during the lame-duck session after the election. His case is simple: there is enough in the bill for both parties to support without resolving every disagreement.Passage would begin another long process rather than settle every question. The House would have to accept the Senate amendment — or the chambers would have to reconcile their differences — before the bill could reach Trump's desk. The SEC, CFTC, Treasury Department and other agencies would then face a broad slate of rulemakings on token disclosures, trading platforms, brokers, custodians, decentralized finance, stablecoin rewards and anti-money-laundering controls, most within one year of enactment. The CFTC's market-structure rules are generally due within 360 days.Much of that work would fall to the CFTC, the smaller of the two market regulators. Its fiscal 2027 budget request seeks $410 million and 650 full-time-equivalent positions, about 12% above what Congress enacted for this year. The five-seat commission currently has one member, Chairman Michael Selig, who has been its only commissioner since December. That is the agency Congress would ask to supervise a large new class of spot markets and intermediaries.The regulators have not waited. In March, the two agencies jointly issued an interpretation of how the federal securities laws apply to different crypto assets and transactions, sorting tokens into five categories and naming widely traded assets they consider commodities, not securities."They have been really clear that they want to collaborate with industry, that the doors are open, they want people to come in and ask questions, to share ideas. So I think industry participants should really take advantage of this friendlier environment to engage with the relevant agency," says Stewart.Chervinsky also sees failure as a setback, not a disaster. "It's very disappointing not to get CLARITY done, but I don't think that it is net harmful to the industry. We are relying on and trusting the regulators to do a good job of figuring out how the industry should be regulated regardless of what happens with the CLARITY Act," he says. "We've built all of these products thus far under the status quo, and I'm pretty confident that we can build a whole lot more, even if we don't get the bill done."