Crypto enters September with Clarity Act gamble hanging by a thread

America's crypto industry heads into September with its signature market structure bill, the Clarity Act, facing a make-or-break Senate vote. Many industry players now believe the bill will not pass before the midterm elections, despite heavy lobbying and political spending.

The bill would create a federal framework for digital assets, split oversight between the Securities and Exchange Commission and the Commodity Futures Trading Commission, set registration rules, and strengthen anti-money-laundering protections. But doubts are mounting about its chances.

Missed window and a September 15 vote

The Clarity Act missed its sponsors' preferred timing when the Senate adjourned for the August recess without voting on the bill. Senate Majority Leader John Thune has now scheduled a key procedural vote for September 15, after the Senate returns, in a move that could open the door to a full floor vote.

Unresolved issues still hang over the bill, including stablecoin rewards and ethics provisions tied to President Donald Trump and his family's crypto interests. Arizona Senator Ruben Gallego, one of only two Democrats to support advancing the bill out of the Senate Banking Committee, has been working on a bipartisan compromise on the ethics language.

“The way to get 60 votes is with good ethics legislation as well as rounding out some of the things that are still outstanding,” Gallego said at the Wyoming Blockchain Symposium in Jackson Hole last month.

John Darsie, CEO of SALT, an investment and networking platform, was blunt about the odds. “I personally am a bit pessimistic about the Clarity Act being passed,” he told CNBC at the same symposium in August. “Leading into the midterms, you don’t often pass legislation of this magnitude.”

Political spending and a deregulation bet

The possible collapse of Clarity comes after historic political spending by the crypto industry. Crypto-backed groups spent more than $200 million in the 2024 election cycle, helping elect crypto-friendly candidates and pushing digital asset regulation into the mainstream.

The bet was simple: a Trump victory and a more accommodating Washington would end years of regulatory hostility. Even if Clarity dies, that bet is already partly paying off. The SEC and CFTC have taken a more lenient approach under Trump, and the Office of the Comptroller of the Currency has also moved toward looser rules for digital assets.

At a cryptocurrency summit in August, Trump said his administration was focused on creating “a clear regulatory framework for pioneers and builders.”

Industry lines up a plan without Clarity

Leaders speaking in Wyoming argued that the sector can still advance without the comprehensive market structure in Clarity. SEC and CFTC rulemaking can supply some certainty, and companies can keep building under the current, more relaxed framework.

“We’ve already seen some contingency planning,” said Sunayna Tuteja, former chief innovation officer at the Federal Reserve, pointing to discussions between the SEC and CFTC about what can be done through rulemaking. “Not perfect, but progress nonetheless.”

Denelle Dixon, president of the Stellar Development Foundation, said the next two years should be used to improve existing regulations and build durable precedent. “Whichever administration takes over, we have all of this bulletproof work that we’ve done to show not only is it successful, but it is advantageous for us to maintain this market structure,” Dixon said.

Still, accepting the status quo leaves the industry chasing clear rules to cut uncertainty, support bitcoin's price, and help companies and investors commit capital.

“If you’re looking to deploy capital and invest, and one jurisdiction has an established framework while another jurisdiction like the U.S. may be subject to, every two to four years, rapid and extreme change, it’s hard to allocate capital,” said Andrew McCormick, head of institutional and market development at Chainlink Labs. Formal legislation, he said, provides certainty that survives changes in administrations and political parties.