Original | Odaily Planet Daily（@OdailyChina）

Author｜Azuma（@azuma_eth）

There are only a few working days left before the U.S. Congress enters its summer recess (expected to start on August 7), and time is running out for the "Digital Asset Market Structure Bill" (hereinafter referred to as the Clarity Act) to make its way through the Senate.

Last week, the White House agreed to include an “ethics provision” in the Clarity Act aimed at restricting the President, Vice President, members of Congress, and other federal officials from profiting from digital assets during their terms. This was widely interpreted by the market as a sign that Trump and the Republican Party had expressed a willingness to compromise and reach a consensus with Democratic senators on the only remaining major disagreement concerning ethical issues.

However, with the announcement of the details of the amendments to the Clarity Act, the market found that the situation is far more complicated than anticipated.

Galaxy's research director Alex Thorn stated over the weekend that the Clarity Act has reached the final “one yard line,” just like in American football, where this final yard may be the hardest one on the field, and politically, it represents a battle for every inch... Given the limited time left and the strong opposition of the negotiating Democratic senators to the existing wording of the ethics provision, they have lowered the probability of the bill being enacted by 2026 to 30%.

The Key Disagreement Lies in the Details of the Ethics Provision

In his article, Alex Thorn summarized that the Clarity Act currently has varying degrees of disagreement on multiple aspects, including developer protections, the boundaries of DeFi regulation, limitations on stablecoin returns, CFTC registration mechanisms, and newly added enforcement provisions.

However, the general consensus in the market is that the biggest disagreement hindering the continued advancement of the bill still lies in the ethics provision that had previously been interpreted as a concession from Trump and the Republican Party.

According to the latest consolidated text released by the Senate, the Clarity Act comprises 616 pages. The newly added content related to ethics provisions primarily serves to restrict the President, Vice President, members of Congress, and other senior federal officials from engaging in activities related to digital assets, which includes prohibiting relevant officials and their spouses from issuing or promoting digital assets during their term, limiting relevant assets from being listed on regulated platforms, requiring disclosures of interests, and introducing a blind trust mechanism. Additionally, the provision stipulates that the relevant enforcement authority will be managed by the Department of Justice (DOJ) and will automatically expire on January 20, 2029, when Trump’s term ends.

The problem lies in the Democratic Party's belief that the current version of the ethics provision still has significant shortcomings.

• First, the Democrats believe that assigning enforcement authority solely to the DOJ does not provide sufficient independence. Since the DOJ is part of the executive system, and the current acting Attorney General Todd Blanche is also Trump’s former personal lawyer, the effectiveness of internal oversight is questionable when the individuals involved are the President or senior executive officials. Therefore, the Democrats demand that enforcement authority be given to various oversight officers.
• Second, the automatic expiration provision in 2029 has also sparked strong criticism from the Democrats. This timeframe coincides exactly with the end of Trump’s current presidential term, which means that after Trump leaves office, his successor will have no legal basis to investigate Trump’s past actions. The Democrats argue that if the Clarity Act aims to establish a long-term regulatory framework for digital assets, then ethical norms should be a permanent institution rather than ending with the conclusion of Trump’s term.
• Moreover, the Democrats are also concerned that the current scope of limitations is still too narrow. The current version primarily regulates direct actions related to issuing or promoting digital assets, but does not explicitly limit participation in crypto asset profit acquisition through affiliated companies, family members, or other indirect means, especially considering that several of Trump’s sons are deeply involved in the cryptocurrency industry. There are still doubts about whether the existing version's coverage is adequate.

Democratic Senator Elizabeth Warren, a consistent strong critic of the bill, harshly criticized the mechanism in the ethics provision that “limits enforcement solely to the DOJ” in an official statement last week, asserting that the bill “should be vetoed as soon as it arrives.”

What has greater implications for the voting count is that the seven Democrats who have been negotiating with Republicans (Senators Mark Warner, Angela Alsobrooks, Cory Booker, Catherine Cortez Masto, Ruben Gallego, John Hickenlooper, and Raphael Warnock) also issued a joint statement saying that the current text “falls short of expectations.”

As for the Republican side, there seems to be no further signs of concession in response to the Democrats' strong resistance. Patrick Witt, the executive director of the White House Digital Asset Advisory Committee, made a strong statement saying that the President has made a historic concession, and the Democrats are still not satisfied — “You can’t hit a home run every time, hitting two home runs at once.”

How Much Time Is Left in the Window?

In the early hours of today, Senate Majority Leader John Thune stated that he would temporarily set aside the Clarity Act to prioritize the confirmation of government officials and the sanctions against Russia. Additionally, the Senate will also occupy time on Tuesday and Wednesday for the funeral of the late Senator Lindsey Graham.

This means that the time available for the Clarity Act to proceed before the summer recess has been further compressed. The current market expectation is that the Clarity Act may enter the voting process at the earliest next week, during the final days before the Senate recess.

Former Senate member Anne Kelley also posted on X today, stating that according to Senate rules, once a controversial significant bill initiates a cloture process, it becomes the top agenda in the Senate — it is practically difficult for the Senate to advance another significant controversial bill simultaneously before completing the amendment review, restarting the cloture process, and undergoing up to 30 hours of formal debate.

This means that the Clarity Act must not only face the challenge of resolving its own disagreements in a timely manner but also compete for the already limited Senate voting time against other controversial bills such as the sanctions against Russia, the budget bill, and the SAVE Act.

This is why, despite the market once expecting the Clarity Act to clear before the recess, an increasing number of Washington observers are beginning to lower their expectations.

For the cryptocurrency industry, this long legislative game has now entered its final stage. The regulatory framework is only “one last step” away from implementation, but whether this step will be taken in the next few days or continue to be postponed to an uncertain future will soon be revealed.

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