Senate's CLARITY Act sprint hits ethics pothole as Trump pulls into Thursday's powertrain meeting 🏛️

President Donald Trump is expected 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, according to people familiar with the plans, as the chamber enters a tight four-week window before an August recess that lawmakers widely view as the bill's last realistic shot this year. Earlier this week, Trump posted on Truth Social calling on the Senate to pass the CLARITY Act "in honor of" Senator Lindsey Graham, who died Saturday at age 71 after a brief illness. Graham, a South Carolina Republican who served in the Senate since 2003, did not serve on the banking or agriculture committees in the current Congress and did not cast any vote advancing the CLARITY Act; he voted in favor of the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act in 2025. In his Truth Social post, Trump wrote 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!!!"

Negotiators are racing to finalize text combining the Senate Banking Committee version (passed 15-9) with the Senate Agriculture Committee version, and former CFTC Commissioner Summer Mersinger, now CEO of the Blockchain Association, said on the Thinking Crypto podcast that a combined proposal could reach the Senate floor "probably early next week." Mersinger described the effort as being "at the one-yard line right now" with supporters working to clear the 60-vote cloture threshold. 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 expected to attend; Lummis said on X that Graham "was passionate about ensuring that American leadership stayed at the forefront of everything - including digital assets." Senator Thom Tillis told Politico, "I'm hoping that we can come up with some agreement by the end of this week. I think it's critical if we're going to try and get this across the floor before August recess."

The unresolved ethics section, which would restrict senior government officials' personal business interests in crypto, has emerged as the bill's central fault line. Many Senate Democrats have said they will not support the legislation without such provisions, citing Trump's disclosed industry ties. Trump's 2025 financial disclosure showed crypto as his largest income source, including more than $1 billion from family ventures led by over $500 million from World Liberty Financial, and a group of Democratic senators held a press conference Tuesday calling for opposition if the bill does not sever Trump's "corrupt" ties to the sector. A revised draft is expected to circulate in the coming days, according to Lummis, who told Fox Business a new version would be introduced in the next several days.

Graham's death and Senator Mitch McConnell's hospitalization have trimmed the GOP majority to 51-47, requiring additional Democratic backing to reach 60 votes. Prediction market odds have reflected the uncertainty: Polymarket traders put the chance of the CLARITY Act being signed into law this year at 39% and, as of July 13, near 24% for passage specifically in 2026, down from above 70% earlier; Galaxy Digital Head of Research Alex Thorn cut his firm's passage odds to 50% citing a shrinking calendar and competition for floor time. Kalshi traders put a 79% chance on a Senate vote before the August recess, up from 68.8% a day earlier, and assigned a 36% chance of the bill becoming law in 2026. Ripple Chief Legal Officer Stuart Alderoty urged lawmakers to back the bill, saying, "We've seen this movie. Let's not watch the sequel," in reference to the FTX collapse, while Custodia separately asked the Supreme Court to revive its denied master account fight with the Federal Reserve.