Overview
- Senators circulated a merged CLARITY Act draft on July 22 that combines texts from the Banking and Agriculture committees but key ethics and enforcement clauses remain unresolved.
- Democratic senators oppose the current ethics language because it does not impose the enforceable limits on officials' crypto ties they seek and because it restricts state attorneys general from bringing certain cases.
- Lead negotiator Senator Cynthia Lummis said the role of state attorneys general was a Republican 'red line' and that ethics, AML and sanctions language will be discussed further over the coming days.
- Prediction markets repriced the bill after the new drafts, with the probability of passage by the end of 2026 falling to about 38.5% from roughly 48% within 24 hours, signaling weaker near‑term chances.
- With the Senate needing roughly 60 votes to advance the bill and an early August recess approaching, failure to secure Democratic buy‑in would likely push regulatory uncertainty into 2027 and leave agencies to act on their own.