Senate Has Four Days Left to Advance CLARITY Act

TLDR

• The Senate has four session days, Aug. 4 through Aug. 7, to advance the CLARITY Act before its August recess begins on Aug. 10.
• The White House is reviewing an ethics compromise proposed by Senators Thom Tillis and Ruben Gallego, one of the last unresolved pieces of the bill.
• Senator Cynthia Lummis released updated 616-page legislation on July 22 combining Banking and Agriculture Committee work.
• The Blockchain Association sent an eight-page letter to Senate leaders disputing the National Sheriffs’ Association’s objections to developer protections in the bill.
• The Senate adjourned Monday without scheduling a CLARITY Act vote, instead working through a continuing resolution.

Lawmakers in the Senate have a short window to move the CLARITY Act forward before leaving Washington for the August recess. The chamber has four scheduled session days, running from Aug. 4 through Aug. 7, before recess begins on Aug. 10.

The bill would set up federal rules for digital asset exchanges, brokers, custodians, and other market participants. Crypto advocacy groups are pushing hard for a vote before lawmakers leave town.

Stand With Crypto, which says it represents more than three million supporters, has urged senators to pass the bill now. The group plans to track and score how each senator votes.

White House Review Holds Up Final Details

One of the last sticking points involves ethics rules for federal officials who hold or trade digital assets. Senators Thom Tillis and Ruben Gallego submitted a compromise proposal, and the White House is currently reviewing it.

Senator Tim Scott, who chairs the Senate Banking Committee, said he hopes lawmakers can move digital asset legislation soon. The ethics section covers transaction restrictions, reporting rules, a required government study, and a sunset provision.

Senator Cynthia Lummis released updated legislation on July 22. The 616-page bill combines work from the Banking and Agriculture Committees after months of talks on consumer protection, enforcement, and oversight.

The Banking Committee already approved the bill in a 15-9 vote. Securities and Exchange Commission Chairman Paul Atkins has said he is hopeful Congress can pass the measure. Strategy Executive Chairman Michael Saylor has also backed the proposal.

Galaxy Research estimates the bill has a 30% chance of becoming law in 2026, citing the ethics talks and the tight schedule.

Blockchain Association Pushes Back on Sheriffs’ Objections

A separate dispute is playing out over how the bill treats software developers. The Blockchain Association sent an eight-page letter on Aug. 3 to Senate Majority Leader John Thune and Minority Leader Chuck Schumer.

The letter responds to the National Sheriffs’ Association, which had objected to the bill’s developer protections on July 31. The sheriffs’ group argued the language was too broad and could make financial crime investigations harder.

The Blockchain Association said the bill separates intermediaries who control customer assets from developers who only write neutral software. Registered brokers, dealers, and exchanges would still face Bank Secrecy Act duties, including anti-money laundering programs and suspicious activity reporting.

A specific section of the bill protects developers who do not control user transactions from being treated as money transmitters. The Blockchain Association said this protection does not touch existing laws on money laundering, fraud, sanctions, or terrorism financing.

The draft also directs the SEC and Treasury to write rules for platforms that call themselves decentralized but still perform intermediary functions. Not every law enforcement group agrees. The Fraternal Order of Police and several other organizations support the bill, while Major County Sheriffs of America has stayed neutral.

The bill sets aside $600 million a year from fiscal 2027 through 2031 for state and local digital asset investigations. It would also give FinCEN $30 million a year over the same period.

No Vote Scheduled Yet

The Senate adjourned Monday without scheduling a vote on the CLARITY Act. Instead, senators invoked cloture on a continuing resolution by an 89 to 4 vote and planned to continue that work on Tuesday.

A cloture filing by Wednesday, Aug. 5 could still allow a procedural vote on Friday under Senate rules. That filing needs at least 16 signatures, and ending debate would require three-fifths of senators.

Even if that vote succeeds, it would not pass the bill itself. Senators would still need to debate the text, consider amendments, and hold a final vote, and the House would need to approve any Senate changes.

The Senate’s state work period runs from Aug. 10 through Sept. 11. As of Monday’s adjournment, no cloture filing or scheduling agreement had been announced for the CLARITY Act.

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