Galaxy Research now believes the CLARITY Act has only a 30% chance of becoming law in 2026, after the final 616-page draft of the US crypto market structure bill exposed political divisions that could block it in the Senate.
The revised forecast, down from 50%, was issued by Galaxy Research Head of Firmwide Research Alex Thorn after senators released the combined legislative text and as the chamber heads towards its August recess, leaving a tightening window to strike a deal.
Thorn said the odds were cut as negotiations became more fraught and the Senate calendar more congested, with backers now viewing the vote count – and the need for solid bipartisan backing – as the biggest obstacle to steering the legislation through.
Comprehensive bill but growing resistance
The CLARITY Act merges proposals from the Senate Agriculture Committee and Senate Banking Committee, adding new sections on ethics, enforcement, stablecoins and custody rules to create a broad federal framework for digital assets.
In a July 24 post on X, Thorn outlined that the bill runs to 104 numbered sections across four divisions and maintains several key industry priorities, including protections for software developers, safeguards for self-custody of digital assets, and a set of rules for digital asset intermediaries.
The legislation would also equip authorities with additional enforcement tools aimed at tackling crypto-related fraud, such as scams targeting older people and so-called “pig-butchering” schemes, while imposing standards for qualified digital asset custodians.
Thorn stressed that political arithmetic, rather than technical drafting, has become the decisive issue for supporters attempting to line up enough cross-party votes to move the bill forward.
Ethics rules at centre of dispute
The latest draft introduces a dedicated ethics division aimed at limiting conflicts of interest among senior officials. It would restrict certain high-ranking government figures and their spouses from issuing or sponsoring digital assets while they are in office.
Under the proposal, those covered would face new disclosure obligations, with the Department of Justice (DOJ) given enforcement powers. However, the measure has prompted pushback from members of Congress who argue it does not go far enough on conflicts of interest and financial crime.
Democratic lawmakers involved in the talks have pressed for tougher ethics standards, stronger consumer protections, more robust safeguards against illicit finance and tighter market integrity provisions. Seven Democrats – Senators Mark Warner, Angela Alsobrooks, Cory Booker, Catherine Cortez Masto, Ruben Gallego, John Hickenlooper and Raphael Warnock – have publicly stated that the current text fails to meet their expectations.
Separately, U.S. Senator Elizabeth Warren (D-MA) criticised the draft, insisting it should include stronger measures to combat financial crime.
These objections have further complicated efforts by negotiators who are trying to assemble enough backing for the bill before senators leave Washington for the August break.
Defining federal oversight of crypto
Substantively, the CLARITY Act is designed to set nationwide rules for how digital assets are classified, how exchanges are supervised, and how custody requirements are applied. It also seeks to clarify how regulatory responsibilities are split between the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
The framework has become a focal point for crypto companies and investors who have long pressed for clearer US rules governing how they can operate.
With the August recess approaching, the remaining time on the Senate’s schedule has become a crucial factor in the bill’s prospects. Disagreements will need to be ironed out quickly if the legislation is to advance before election-year priorities and the broader 2026 campaign season start to dominate the congressional agenda.
Future of bill remains uncertain
The current showdown follows years of attempts in Washington to create a comprehensive federal regime for crypto markets, efforts that have repeatedly stalled as lawmakers struggled to agree on the shape of a final framework.
The latest negotiations have kept the CLARITY Act’s future in doubt, as supporters attempt to bridge political divides that have hardened around ethics provisions in particular.
Those ethics measures remain among the most contentious elements of the bill, with senators clashing over standards for government accountability, levels of oversight and the strength of protections against financial crime. Democratic lawmakers have renewed their criticism of the draft after raising concerns about whether the safeguards it sets out are adequate.
With 100 days remaining until the 2026 midterm elections, crypto-focused voters are closely tracking the CLARITY Act while lawmakers come under intensifying pressure to resolve their differences and determine whether the bill can move forward.
