The CLARITY Act is closer to becoming U.S. crypto law than it was when the Senate Banking Committee advanced it in May. But it is not law yet.
As of August 7, 2026, the Digital Asset Market Clarity Act, H.R. 3633, has passed the House, cleared the Senate Banking Committee, and remains on the Senate Legislative Calendar under General Orders as Calendar No. 423. It is eligible for full Senate floor consideration, but no cloture motion has been filed and no full Senate floor vote has taken place. The earlier July 4 signing target and the August recess target have both passed without action. The picture has changed significantly since the July end update. Senate Republicans released updated bill text on July 22 containing the first-ever ethics provisions restricting presidential crypto profits. and Democrats rejected it within hours.
On July 23, Senate Majority Leader John Thune publicly cast doubt on passing the bill before the August recess. In late July, Sens. Thom Tillis (R-NC) and Ruben Gallego (D-AZ) finalized and sent a bipartisan ethics counterproposal to the White House that would allow state attorneys general enforcement authority. Negotiations continued into early August, but on August 6 Thune confirmed the Senate would delay any procedural vote until after the recess, saying Democrats were “insistent on no Clarity vote” and that the bill would be “queued up first thing when we come back” in mid-September. The bill is no longer waiting for text. It is waiting for a final ethics deal and floor time in a compressed post-recess calendar.
Current status of the CLARITY Act
The CLARITY Act has not passed the Senate and has not become law.
The bill’s latest official movement came on June 1, 2026, when the Senate Banking Committee reported it with an amendment in the nature of a substitute and it was placed on the Senate Legislative Calendar under General Orders as Calendar No. 423. That matters because it means the bill no longer needs another Senate Banking Committee vote before Senate leadership can bring it to the floor.
The most important developments are the late-July bipartisan ethics counteroffer from Tillis and Gallego (sent to the White House around July 30), continued White House engagement on that language into early August, the Senate’s prioritization of nominations and a Russia sanctions bill in late July, and Majority Leader Thune’s August 6 confirmation that no pre-recess vote would occur. The July 22 Republican text (merging Banking and Agriculture approaches and adding DOJ-only ethics language with a 2029 sunset) remains the public baseline, but both Democrats who voted the bill out of committee, Ruben Gallego and Angela Alsobrooks, continue to oppose that version. Gallego has worked with Tillis on the counterproposal that shifts enforcement toward state attorneys general.
The next fight is no longer whether the bill can escape committee. It can. It is also no longer whether a unified text exists. It does. The next fight is whether Senate leaders can finalize an ethics compromise the White House and enough Democrats will accept, schedule floor time in the limited September window, and secure 60 votes before midterm election pressures intensify.
Quick answer: Has the CLARITY Act passed?
No. The CLARITY Act has passed the House and cleared the Senate Banking Committee, but it still needs:
- A full Senate floor vote (a cloture vote on the motion to proceed must come first)
- At least 60 votes to overcome a filibuster
- Reconciliation with the House-passed version if the Senate text differs
- Final passage by both chambers
- A presidential signature
Until those steps happen, crypto companies, exchanges, developers, and users are still operating under the current patchwork of SEC, CFTC, Treasury, FinCEN, and state-level rules.
Why the July 4 target failed
In May, White House digital-assets adviser Patrick Witt said the administration was targeting July 4 for CLARITY Act passage, calling it a possible “birthday present for America.” That timeline required Senate Banking markup in May, floor movement in June, quick House action, and a presidential signature before Independence Day.
The first piece happened. Senate Banking advanced the bill on May 14 in a 15-9 vote, with all 13 Republicans joined by Democratic Senators Ruben Gallego and Angela Alsobrooks. Notably, Alsobrooks, who had played a leading role in shaping the compromise language on stablecoin yield during markup, explicitly warned that her committee support would not translate into support on the floor unless outstanding issues were addressed. But the rest of the timeline slipped.
That missed deadline did not kill the bill. But it changed the tone.Weeks later the same pattern repeated at a higher level: the August recess target also slipped after Thune confirmed on August 6 that no vote would occur before the break.
Updated CLARITY Act timeline
| Date | Event | Status |
|---|---|---|
| May 29, 2025 | H.R. 3633, the Digital Asset Market Clarity Act, introduced in the House | Done |
| July 17, 2025 | House passes the CLARITY Act by 294-134 | Done |
| September 18, 2025 | Bill received in the Senate and referred to Senate Banking | Done |
| May 14, 2026 | Senate Banking Committee advances the bill 15-9 | Done |
| June 1, 2026 | Bill placed on Senate Legislative Calendar as Calendar No. 423 | Done |
| July 4, 2026 | White House signing target missed | Missed |
| July 13, 2026 | President Trump publicly urges senators to pass the bill on Truth Social, invoking competition with China | Done |
| July 16, 2026 | Trump meets senators and White House staff in the Oval Office to negotiate ethics provisions | Done |
| July 17, 2026 | House Financial Services holds a CLARITY field hearing at Federal Hall, New York; updated Senate text delayed again | Done |
| July 18, 2026 | GENIUS Act rulemaking deadline passes with zero final rules issued; a warning sign for CLARITY’s own implementation phase | Missed |
| July 22, 2026 | Senate Republicans release updated CLARITY text with ethics provisions (DOJ-only enforcement, 2029 sunset); Gallego and Alsobrooks reject it same day | Done |
| July 23, 2026 | Thune casts doubt on passage before recess; Gallego and Tillis begin work on a bipartisan ethics counteroffer | Done |
| July 24, 2026 | Fraternal Order of Police endorses the CLARITY Act, reversing earlier opposition | Done |
| Late July 2026 | Senate prioritizes federal nominations and Russia sanctions bill; CLARITY temporarily sidelined | Done |
| July 29–30, 2026 | Sens. Thom Tillis and Ruben Gallego finalize and send bipartisan ethics counterproposal to the White House (reportedly allowing state attorneys general enforcement) | Done |
| Early August 2026 | White House continues reviewing/negotiating the Tillis-Gallego ethics language; no final agreement reached | Done |
| August 6–7, 2026 | Thune confirms no pre-recess vote; cloture not filed for CLARITY; bill delayed until mid-September return | Missed |
| Week of July 27 / early August | Last realistic window to tee up a cloture vote before the recess | Missed |
| Before August recess | Best remaining 2026 window for Senate passage, now confirmed as missed by Senate leadership | Missed |
| Mid-September 2026 (Senate returns ~Sept. 14) | Next realistic window for cloture and floor action; limited working days before midterms | Watch |
| After Senate passage | House and Senate versions must be reconciled | Pending |
| After final congressional passage | President can sign the bill into law | Pending |
| 6–18 months after enactment | SEC, CFTC, Treasury and other agencies begin rulemaking | Future |
| 12–36 months after enactment | Final rules, compliance deadlines and enforcement phase-ins | Future |
What happens next?
The CLARITY Act’s next step is Senate floor consideration. That sounds simple, but the problems have narrowed and hardened.
First, Senate leadership has confirmed the bill will be queued for action “first thing” upon return in mid-September. Thune stated Democrats were insistent on no pre-recess vote. Under standard Senate procedure, a cloture sequence can consume the better part of a week; the September window offers only limited working days before members focus on the November midterms.
Second, Republicans need Democratic votes. The Senate has a 53-47 Republican majority, while most major legislation still needs 60 votes to overcome a filibuster. That math has worsened. Republican Senators Josh Hawley and Rand Paul are expected to oppose the bill on substantive grounds, meaning supporters likely need eight or more Democrats rather than seven. The Republican margin also narrowed following the death of Senator Lindsey Graham in July and the continued absence of Senator Mitch McConnell.
Third, the Senate Banking and Agriculture texts have now been merged in the July 22 draft, resolving one of the four problems identified earlier this month. Remaining technical work reportedly covers exchange vertical integration, affiliate trading, and state-law preemption, which Blockchain Association CEO Summer Mersinger has described as “technical edits” rather than open disputes.
Fourth, lawmakers still need to resolve the ethics fight. The July 22 DOJ-only text was rejected; the Tillis-Gallego counteroffer (state AG enforcement) was sent to the White House in late July and remained under active discussion into early August, but no final public agreement was reached before the recess. This remains the only obstacle that genuinely matters.
The main hurdles now
1. Ethics provisions: The fight is now about enforcement, not principle
The ethics fight remains the largest political obstacle. During the May 14 markup, Senator Chris Van Hollen’s ethics amendment failed. Republicans argued the issue could be handled later, while Democrats warned that final support would depend on stronger safeguards.
That debate has now produced actual legislative text, and a new impasse that has partially evolved.
The July 22 draft would, for the first time, bar the president, vice president, members of Congress, federal judges and other covered officials from issuing or sponsoring digital assets for compensation while in office. Lummis called it “the most robust ethics rules ever imposed on the office of the presidency.” The White House publicly urged Democrats to accept it. It included a January 20, 2029 sunset and exclusive DOJ enforcement.
Democrats rejected it over a single clause: the provision gives the Department of Justice exclusive authority to enforce the new rules. Democrats had pushed for state attorneys general to hold parallel enforcement power, and the final text left them out. As The Crypto Times reported on July 21, enforcement authority, not the substance of the restrictions, is now the specific point on which months of negotiation collapsed.
Alsobrooks summarized the Democratic objection in four words to reporters: “Look at this Department of Justice.” Gallego was blunter, stating that the Republican offer was “not a serious effort.” He then worked with Republican Senator Thom Tillis on a counterproposal. By July 29–30 that bipartisan language had been finalized and sent to the White House; reporting indicates it would allow state authorities to enforce the ban on federal officials issuing or sponsoring digital assets. White House negotiations on the counteroffer continued into the first week of August but did not produce a public deal before the recess.
The underlying pressure has also intensified. President Trump’s 2025 financial disclosure, released June 30, showed roughly $1.4 billion in crypto-linked income, including approximately $635 million from the TRUMP memecoin, which Senator Elizabeth Warren has used to argue that any bill without binding ethics rules would be “a flagrant giveaway.” Warren also requested an SEC investigation related to Trump’s crypto activities in early August.
Notably, the fight has also turned intraparty. Progressive groups including Indivisible, Demand Progress and the Revolving Door Project wrote to every Senate Democratic office in July attacking Senator Kirsten Gillibrand, one of the Democrats brokering a compromise, over her family’s crypto ties.
2. The 60-vote Senate threshold
The 15-9 committee vote was important, but it does not prove that the bill has 60 votes on the Senate floor. Gallego and Alsobrooks both supported advancing the bill out of committee, but their support was conditional. Both have now formally opposed the July 22 text, meaning the bill currently has zero committed Democratic votes on the floor. The Tillis-Gallego counteroffer is the vehicle that could change that. The floor vote is where the real coalition must be built.
3. Law-enforcement concerns
The bill’s developer-protection language, especially the Blockchain Regulatory Certainty Act provisions, has become a flashpoint. Some law-enforcement groups warned that parts of the bill could create gaps for illicit finance enforcement, while industry groups argued the bill gives investigators clearer tools than the current system.
NOBLE, the National Organization of Black Law Enforcement Executives, endorsed the CLARITY Act, becoming the first major law-enforcement organization to publicly support it. Major County Sheriffs of America also moved to a neutral position after further discussions. On July 24 the Fraternal Order of Police endorsed the bill, reversing an earlier letter of opposition over BRCA provisions.
Two developments have shifted this since. On the supportive side, Democratic Senator Ron Wyden, the standalone BRCA’s only Democratic co-sponsor, wrote to Senate leaders urging them to preserve Section 604 as passed by Banking, arguing it codifies existing FinCEN policy and rejecting as “inaccurate” claims that it weakens anti-money-laundering safeguards.
On the opposing side, the National Sheriffs’ Association released a video branding crypto “the cartel currency of choice,” reviving the illicit-finance attack. That has complicated efforts to win over Democrats including Catherine Cortez Masto and Mark Warner, who have signalled their support depends on whether law-enforcement and DOJ concerns are addressed. “I want America to lead in digital assets,” Warner said, “but if we get it wrong, the downside ramifications could be huge as well.”
4. Developer protections
Crypto founders, exchanges, infrastructure firms, and venture investors have urged senators to preserve the developer protections that survived the Senate Banking process. In a June 9 letter, more than 60 industry leaders pressed Senate leadership to keep the BRCA provisions intact.
Current indications are that this fight has largely been won. Mersinger has said she expects the Section 604 developer shield to “remain intact” in the final text.
5. Stablecoin yield: Reopened by the banking lobby
The stablecoin rewards compromise brokered by Senators Tillis and Alsobrooks in May was supposed to settle this issue. It has not. On July 13, the American Bankers Association, the Independent Community Bankers of America and roughly 78 state banking associations wrote to Senate leaders seeking further changes to Section 404, warning that ambiguities could let stablecoin arrangements function as deposit substitutes and trigger deposit flight from community banks. The letter requested specific revisions to Section 404(c)(1), including removing the word “solely” and replacing the “functional and economic equivalence” test with a “substantially similar” standard. Banking opposition continued into August and remains an active secondary dispute.
6. Floor time
The calendar may be as important as the substance. Galaxy Research cut its 2026 passage odds to around 30%, citing the lack of a unified Senate text, no firm floor schedule, and a shrinking legislative window.
Prediction markets have been far more volatile, and more pessimistic. Polymarket odds on the CLARITY Act becoming law in 2026 fell from above 80% in February to a record low near 24% in mid-July, rebounded briefly when the updated text was expected, settled around 35% as the ethics deadlock hardened in late July, and by early August had dropped further to the mid-teens (approximately 13–15% as of August 7). Even a direct public appeal from President Trump on July 13 failed to move the market upward, a signal traders believe the binding constraint is Democratic votes, not presidential enthusiasm. The pre-recess vote contract itself collapsed to single-digit or low-teens probabilities by August 6–7.
Why the August recess mattered
The practical deadline of the August recess has now been missed.
The Crypto Times’ and other reporting identified early August as the effective cutoff for Senate passage before the summer break. That window closed on August 6–7 when Thune confirmed no cloture would be filed and the vote would be delayed until the Senate’s return in mid-September.
As of August 7, Senate leadership itself has conceded the point. Thune stated that Democrats were insistent on no Clarity vote before the break and that the bill would be queued “first thing when we come back.”
Senator Lummis has warned that missing this window could delay comprehensive market-structure legislation for years, potentially as far out as 2030.
This does not mean the bill is dead after August. But it does mean the political cost of spending floor time on complex crypto legislation rises sharply in a September calendar dominated by government-funding needs, remaining nominations, and midterm campaigning. Only a limited number of working days remain before the November elections.
What the GENIUS Act’s missed deadline tells us
One development outside the bill itself deserves attention from anyone tracking CLARITY’s timeline.
On July 18, 2026, the first anniversary of the GENIUS Act, the statutory deadline for federal agencies to finalise stablecoin implementing rules passed without a single final rule being issued. Six agencies, including the Treasury, OCC, FDIC, NCUA, Federal Reserve, and FinCEN, had collectively published roughly 10 proposed rules and finalized none. The law’s January 18, 2027 effective date is unchanged, leaving issuers in a roughly $310 billion market facing compliance obligations that exist only in draft form.
This is directly relevant to CLARITY. It demonstrates that passage is not the finish line, and that the rulemaking timelines projected below should be treated as optimistic rather than assured.
What the CLARITY Act would change
The CLARITY Act is designed to create a federal market-structure framework for digital assets in the United States.
At a high level, the bill would clarify when a digital asset is treated as a digital commodity, when securities laws still apply, and how platforms such as exchanges, brokers, and dealers register or operate under federal oversight. The framework would give the CFTC a larger role in digital commodity spot markets while preserving SEC authority over investment-contract assets and securities-related activity.
One consumer-protection provision has become central to the bill’s public case. Section 701, in Title VII (“Protecting Customer Property”), would amend the U.S. Bankruptcy Code so that customer digital assets are legally treated as belonging to customers rather than becoming part of a failed platform’s bankruptcy estate, with a construction rule preventing platform terms of service or commingling from converting customer holdings into estate property. Senator Lummis has spent recent weeks invoking the Celsius and Voyager bankruptcies and Terra’s roughly $40 billion collapse to argue this is the bill’s most important protection for ordinary holders.
A capacity question has also emerged. At a House Agriculture subcommittee hearing on July 21, former CFTC lawyer Carl Kennedy warned the agency may be too short-staffed to absorb the expanded mandate CLARITY would give it. The CFTC is currently operating with a single sitting commissioner and has requested a $410 million budget for fiscal 2027.
For users and investors, the immediate impact would be limited. Even if the bill passes, the legal framework would not become fully operational overnight.
What happens if the CLARITY Act becomes law?
If the CLARITY Act becomes law in 2026, the next stage will be rulemaking.
| Stage | What happens | Estimated timing |
|---|---|---|
| Enactment | President signs the bill | Day 0 |
| Agency preparation | SEC, CFTC, Treasury begin drafting proposed rules | 0–6 months |
| Proposed rules | Agencies publish rule proposals | 6–12 months |
| Public comment | Firms, investors, lawyers and developers submit feedback | 30–90 days per rule |
| Final rules | Agencies publish binding rules | 12–18 months after enactment |
| Compliance phase-in | Exchanges, brokers, dealers and custodians adapt systems | 6–24 months after final rules |
| Active enforcement | Regulators begin deeper audits and penalties | 18–36 months after enactment |
These estimates should now be read with caution. The GENIUS Act missed its own one-year rulemaking deadline entirely, and the CFTC, which CLARITY would make the primary digital-asset regulator, is operating with one commissioner and an unfunded budget request.
What happens now that the bill missed the August window?
The bill can still technically move later. But the odds become worse.
The fall calendar will be crowded. The Senate returns around September 14 for a limited number of working days. The 2026 midterm election cycle will make controversial votes harder. The industry’s political spending compounds the timing problem: the crypto super PAC Fairshake is sitting on roughly $125 million ahead of the midterms, which gives both parties an incentive to settle before campaign season, and gives critics a reason to characterise the bill as industry-purchased.
Industry groups (Digital Chamber, Crypto Council for Innovation and others) have stated the fight is “far from over” and that work will continue toward a September vote.
Market reaction: What changed since May?
The strongest market reaction came after the May 14 committee vote. At the time, Bitcoin traded around $82,000, Coinbase stock rose, and several crypto-linked equities moved higher.
The picture in early August is markedly weaker. Bitcoin has been trading near the low-to-mid $60,000s, and the July 22 text release and subsequent ethics developments did not produce a sustained rally. Polymarket 2026 passage odds have fallen into the mid-teens. The legislative uncertainty is now one input among several, alongside a hawkish Federal Reserve under Chair Kevin Warsh, elevated oil prices tied to the Iran conflict, and continued ETF outflows.
For traders, the next watchpoints are simple:
- Does the White House accept (or further negotiate) the Tillis-Gallego ethics counteroffer that includes state attorney general enforcement?
- Does Senate leadership schedule a cloture vote immediately upon the mid-September return?
- Do Gallego, Alsobrooks, Gillibrand, Warner, Booker, Coons, Cortez Masto or other Democrats signal support for a revised ethics package?
- Do law-enforcement groups remain neutral or supportive?
- Does the House signal it will accept the Senate text quickly?
What crypto companies should do now
Crypto companies should not wait for final passage to prepare. The exact rules may change, but the direction is clear: federal registration, custody standards, consumer disclosures, AML controls, recordkeeping, market-surveillance systems, and clearer platform obligations are likely to become more important if the bill passes.
With the July 22 text now public and the Tillis-Gallego ethics counteroffer under White House review, firms can begin substantive gap analysis rather than planning in the abstract, while recognising that the ethics provisions, and potentially the enforcement architecture around them, remain subject to change.
What crypto users should know
For everyday crypto users, nothing changes today.
The CLARITY Act is not law. Your exchange account, wallet activity, token holdings, and trading access remain governed by the existing legal and regulatory environment.
The bottom line
The May 14 Senate Banking vote was a major breakthrough. The June 1 calendar placement moved the bill closer to the floor. The July 22 text release removed the last procedural excuse for delay. The late-July Tillis-Gallego ethics counteroffer and continued White House engagement kept the bill alive into August, but Majority Leader Thune’s August 6 confirmation that no pre-recess vote would occur closed the most favorable 2026 window.
What remains is still a single, unresolved question: who enforces ethics rules governing the president and other officials. Republicans initially offered restrictions enforceable only by the Department of Justice (with a 2029 sunset). Democrats rejected that; the bipartisan counteroffer shifts enforcement toward state attorneys general and remains under White House review. Senate leadership has queued the bill for action upon return in mid-September.
The CLARITY Act is not dead. It is not done either. It now has text, a bipartisan ethics counterproposal, a coalition of would-be supporters in both parties, and a compressed September legislative calendar, and it is still stuck primarily on the question of ethics enforcement.
FAQs
Has the CLARITY Act passed?
No. The CLARITY Act passed the House in 2025 and cleared the Senate Banking Committee in May 2026, but it has not passed the full Senate and has not become law. No cloture motion has been filed.
What is the latest CLARITY Act update?
Senate Republicans released updated bill text on July 22, 2026, merging the Banking and Agriculture approaches and adding ethics provisions barring covered federal officials from issuing or sponsoring digital assets while in office (DOJ-only enforcement, 2029 sunset). Democrats rejected that version. In late July Senators Thom Tillis and Ruben Gallego sent a bipartisan counterproposal to the White House that reportedly allows state attorneys general enforcement. On August 6 Majority Leader Thune confirmed the Senate would not vote before the August recess and would queue the bill for action upon return in mid-September.
Did President Trump sign the CLARITY Act on July 4?
No. The July 4 signing target was missed. The August recess target was also missed. The bill still needs a Senate floor vote, House-Senate alignment, and a presidential signature.
When could the Senate vote on the CLARITY Act?
Supporters had targeted a vote before the early-August recess; that window is now closed. Senate leadership has stated the bill will be queued “first thing” when the chamber returns in mid-September (~September 14). Completing passage in the limited post-recess window before the midterms remains challenging without a rapid final ethics agreement.
Why does the CLARITY Act need 60 votes?
In the Senate, most major legislation needs 60 votes to overcome a filibuster. With Republicans holding 53 seats, and with Senators Hawley and Paul expected to vote no, the bill likely needs eight or more Democratic votes.
What is blocking the CLARITY Act?
Primarily one issue: who enforces the ethics provisions restricting officials from profiting off crypto. Republicans proposed exclusive Justice Department enforcement (July 22 text); Democrats rejected it. A bipartisan Tillis-Gallego counteroffer allowing state attorneys general enforcement was sent to the White House in late July and remained under negotiation into early August, but no final deal was reached before the recess. Secondary disputes remain over stablecoin yield language in Section 404 and the scope of law-enforcement concerns around developer protections. Floor time and midterm politics are now also major constraints.
What is the ethics fight about?
The July 22 text would bar the president, vice president, members of Congress, federal judges and other covered officials from issuing or sponsoring digital assets for compensation while in office — a first. It included exclusive DOJ enforcement and a 2029 sunset. The dispute is not over those restrictions but over enforcement: Democrats argue that rules policed only by the Justice Department, whose leadership serves at the president’s pleasure, cannot meaningfully constrain the president. The Tillis-Gallego counteroffer addresses this by shifting enforcement authority toward state authorities. The issue gained urgency after Trump’s 2025 financial disclosure showed roughly $1.4 billion in crypto-linked income.
What is BRCA in the CLARITY Act?
BRCA refers to the Blockchain Regulatory Certainty Act provisions: developer-protection rules clarifying when non-custodial software developers should not be treated as financial intermediaries. Democratic Senator Ron Wyden, the standalone BRCA’s Democratic co-sponsor, has urged Senate leaders to preserve the language, and industry sources expect it to survive in the final text. The Fraternal Order of Police endorsed the overall bill on July 24 after earlier concerns about these provisions.
Would the CLARITY Act make Bitcoin a commodity?
The bill is designed to clarify the SEC-CFTC split and strengthen the CFTC’s role over digital commodity spot markets. Bitcoin is already widely treated as a commodity by U.S. regulators.
When would crypto companies actually need to comply?
Not immediately after passage. And the GENIUS Act’s experience is instructive: that law passed in July 2025 and its agencies missed their one-year rulemaking deadline entirely, with zero final rules issued as of July 18, 2026.
Is the CLARITY Act good or bad for crypto?
It depends on the final text. Supporters say it gives the U.S. crypto industry long-needed legal clarity and creates clearer consumer protections, including Section 701’s bankruptcy safeguards for customer assets. Critics worry about ethics gaps, law-enforcement limits, stablecoin rewards, and whether the CFTC has the staffing and budget to administer the authority the bill would give it.
What should users watch next for CLARITY updates?
Watch for White House action on the Tillis-Gallego ethics counteroffer, a cloture vote schedule upon the mid-September Senate return, Democratic vote signals, whether law-enforcement groups remain supportive, and whether the limited September calendar can accommodate the bill before midterm pressures dominate.
