Senate Math Can't Do Calculus: CLARITY Act Hits Ethics Wall Before August Recess 🏛️

President Donald Trump is scheduled to meet with U.S. senators at the White House on Thursday to negotiate the ethics provisions of the Digital Asset Market Clarity (CLARITY) Act, as the crypto market structure bill faces a narrowing window before the Senate's August recess. Senator Bernie Moreno said a group of senators will brief the president on the bill and "its path to success," and Senator Cynthia Lummis is also expected to attend, according to a Senate Republican aide. "We'll be talking about the entirety of the bill. I mean, obviously the president's been very engaged in this bill," Moreno said. "He's the one who's really driven the innovation that I think will pay dividends." Senator Thom Tillis, who has been helping work through the CLARITY Act's unresolved provisions, said he hopes for an agreement by the end of the week. "I think it's critical if we're going to try and get this across the floor before August recess," Tillis said.

On Monday, Trump posted on Truth Social urging the Senate to pass the CLARITY Act in honor of Senator Lindsey Graham, who died at age 71 over the weekend after a brief illness. The South Carolina Republican had served in the Senate since 2003. Trump called Graham a supporter of the bill and warned that "China, and many other countries, would like to take complete and total control of this major financial 'happening,' as well as A.I., where we are now leading, but where they are fighting hard. Don't let China win on either subject!!!" Lummis said on X that she supported Trump's comment, adding that Graham "was passionate about ensuring that American leadership stayed at the forefront of everything - including digital assets." White House spokespeople did not immediately comment on the meeting plans.

The Senate has four weeks in session before a month-long state work period in August, giving lawmakers what is widely viewed as the bill's last realistic chance this year. The House passed the Digital Asset Market Clarity Act 294-134 in July 2025, and the legislation later cleared the Senate Banking Committee 15-9. Passing the bill on the Senate floor requires 60 votes, a threshold complicated by Graham's death and Senate Minority Leader Mitch McConnell's absence since mid-June, which leave Republicans with a 51-47 margin. Cointelegraph contacted the offices of Senators Tim Scott, Kirsten Gillibrand, and Angela Alsobrooks for reaction to Trump's comments but did not receive an immediate response.

The unresolved ethics section seeks to restrict senior government officials' personal business interests in the crypto sector, a provision Democrats have demanded to address Trump's own ties. Trump disclosed that he made more than $1 billion from his industry involvement in 2025, including more than $500 million from World Liberty Financial. Ripple Chief Legal Officer Stuart Alderoty said voting against the CLARITY Act would allow bad actors to continue exploiting the current unregulated environment. "We've seen this movie. Let's not watch the sequel," Alderoty said, referencing the FTX collapse. On Tuesday, a group of Democratic senators held a press conference calling for CLARITY Act opposition if it does not sever Trump's "corrupt" ties to the sector; Senator Ruben Gallego, a Democrat who has been at the front of negotiations, did not participate. Three Democratic senators have publicly opposed the bill on ethics grounds.

Prediction market traders have grown less optimistic about passage this year. Polymarket traders put the chance of the CLARITY Act being signed into law in 2026 at 39%, down from above 70% earlier this year. Galaxy Digital Head of Research Alex Thorn's firm recently cut its passage odds to 50%, citing a shrinking calendar and competition for floor time. On Kalshi, traders priced a 79% chance the CLARITY Act will be voted on by the Senate before the August recess, up from 68.8% the previous day, while a separate $3 million Kalshi market gave the bill a 36% chance of becoming law in 2026 and a 62% chance of doing so before the end of 2027. Solana Policy Institute President Kristin Smith said there is a real path to passage, citing building momentum and the emerging bill text. Lummis said in a Fox Business interview Wednesday that a new draft version will be introduced in the next few days and that she expects it on the Senate floor next week. The U.S. House Financial Services Committee is also scheduled to hold a hearing on the CLARITY Act's role in unlocking innovation on Friday.