Clarity Act Hits August Wall: Thune Admits Crypto Bill Won't Beat the Summer Break 🏖️

The CLARITY Act is unlikely to clear the U.S. Senate before the August recess, Senate Majority Leader John Thune told reporters on Thursday, dealing a setback to efforts to establish the first comprehensive federal framework for digital-asset market structure. "I don't think we'll be able to get them done. I would like to at least get Clarity started. We'll see where the votes are," Thune said. White House crypto adviser Patrick Witt countered that the first week of August still has potential, while Solana Institute President Kristin Smith said on X, "There is a clear path to pass the Clarity Act before the recess on August 7 — and we must seize it." Industry and congressional negotiators had focused on August 7 as the informal deadline for the Digital Asset Market Clarity Act to retain a viable path to 2026 passage, according to Punchbowl News reporter Brendan Pedersen.

Republicans on Wednesday unveiled an updated 616-page text that would bar federal officials, including the president, from issuing or sponsoring digital assets, with enforcement vested solely in the Justice Department. Democrats rejected the package, with Sen. Ruben Gallego, one of only two Democrats to back the bill in committee, telling Politico the GOP offer was not a serious effort and vowing to send back counter-language. Sen. Thom Tillis called the White House-backed measure "a step in the right direction" but conditioned his support on stronger guardrails. Roughly seven Democrats, including Angela Alsobrooks, Mark Warner and Catherine Cortez Masto, said they cannot support the current draft, citing gaps on ethics and illicit finance. The bill needs 60 votes to advance; Republicans hold 53 seats.

The ethics fight centers on President Donald Trump's crypto business activities. Trump reported roughly $1.4 billion in crypto-related income, largely from the $TRUMP meme coin and World Liberty Financial. Democrats have raised conflict-of-interest concerns, and critics have pointed to a loophole protecting coins launched before an official takes office, as well as a 2029 sunset on the new rules and a state-action bar that blocks state attorneys general from enforcement, with authority concentrated in the Justice Department whose acting head, Todd Blanche, previously served as Trump's personal lawyer. Ripple Chief Legal Officer Stuart Alderoty argued the bill is nonetheless a consumer-protection measure with strong AML/KYC and law enforcement tools, saying "perfect can't be the enemy of good," a sentiment echoed by Ripple CEO Brad Garlinghouse in a post on X urging Congress to pass the act. Coinbase CEO Brian Armstrong also said the bill is ready for a full Senate floor vote.

More than 200 crypto groups, including the Blockchain Association, the Crypto Council for Innovation and the Digital Chamber, sent a joint letter to Thune and Minority Leader Chuck Schumer urging floor consideration. Sen. Cynthia Lummis released new customer-protection text that would safeguard user assets at failed exchanges, drawing on the Celsius and Voyager collapses of 2022. The National Fraternal Order of Police, representing more than 382,000 officers, endorsed the revised bill on Friday, writing that its "initial concerns have been satisfactorily addressed." Wintermute Head of Policy and Advocacy Ron Hammond told Fortune, "The votes are there, but the election politics are louder. The latter will dissipate after November and that's a narrow but very possible window." Sen. John Kennedy has warned that missing the August deadline diminishes the bill's odds, and Thune's staff indicated the next immediate priority for floor time will be a bipartisan bill on sanctions tied to Russian leadership and tariffs for trading partners, championed by the late Sen. Lindsey Graham, with that legislation expected to reach the floor next week.