The CLARITY Act’s chance of becoming law in 2026 dropped to 31% in Polymarket as the White House withheld support for the controversial ethics provision.
Summary
- White House resistance to ethics rules has delayed progress on the CLARITY Act.
- Polymarket traders put the chances of the 2026 bill being approved at only 31%.
- Controversies over Trump’s crypto commitments and DeFi protection threaten Senate vote.
Crypto In America reported that the White House has not approved the code of conduct since July 20, despite President Donald Trump meeting with Republican Senators last week to discuss the crypto market structure bill. Sources quoted by the agency also said that the administration has not yet explained what ethical parameters they can accept.
Without a clear position from the White House, Senate negotiators may need more time to prepare a revised version of the legislation, according to the report. The delay could derail Republican plans to bring the CLARITY Act to the Senate floor before lawmakers leave Washington for their August recess.
Senate Majority Leader John Thune wants to schedule a vote before August, but acknowledged that Republicans have yet to find a bipartisan agreement. Under Senate rules, the party would need Democratic support to overcome procedural hurdles and move legislation forward.
Democrats have sought limits on elected officials’ involvement in digital assets, with their concerns centered on Trump’s crypto interests. According to the president’s financial disclosure, his digital asset businesses brought in $1.4 billion in revenue last year.
Senator Elizabeth Warren also called for updated financial disclosures from Trump. As previously reported by crypto.news, Warren said the senators needed the document while considering the code of conduct for crypto legislation.
The controversy has begun to weigh on market expectations. Polymarket brokers now give a 31% chance that Trump will sign the CLARITY Act into law this year, which puts the contract near its lowest level since the prediction market opened.
Codes of conduct have become a major obstacle
Democratic senators have accused Republicans of keeping them out of recent discussions on the ethics provision, according to Crypto In America. Their grievances include a White House meeting last week, which reportedly involved Trump and Republican lawmakers but no Democratic negotiators.
Although Trump has met with senators to discuss the legislation, the White House has not told negotiators what restrictions the president will support, sources told the media. The lack of guidance leaves lawmakers without an agreed-upon language to separate the public and private interests of crypto.
Warren and other Democrats linked their demand to Trump’s financial ties to the industry. Their proposed safeguards seek to limit the power of presidents and other top officials to profit from digital asset businesses while shaping federal crypto policy.
Republicans must decide whether to accept an ethics provision that is strong enough to attract Democratic votes without losing the support of Trump or members of their own party. Thune’s comments indicate that the Senate does not yet have the agreement needed to continue negotiations, and the looming recess leaves negotiators with little time to resolve the dispute.
The House has already passed its version of the CLARITY Act, but the Senate must approve its text before the legislation reaches Trump’s desk. Any differences between the two versions will also need to be resolved and approved by both chambers, adding more steps to an already compressed timetable.
For crypto companies, the bill aims to establish clear federal oversight by defining the roles of the Securities and Exchange Commission and the Futures Trading Commission. Its slow progress leaves those proposed laws tied up in debates about the president’s ethics and distributions.
DeFi security is always a source of conflict
Along with the ethics debate, the Blockchain Regulatory Certainty Act has continued to divide CLARITY Act supporters and legislative groups. The language of the BRCA will protect the developers of decentralized policies from being held responsible for the work done by their users.
Under the provisions, eligible developers will not automatically be treated as remitters simply because they create or maintain decentralized software. Industry groups view such protection as necessary for engineers who do not handle customer assets or manage operations.
Law enforcement agencies have taken the opposite view, saying the proposal would make investigations into illegal financing more difficult. Their opposition added another contentious issue to senators preparing a revised market structure bill.
Blockchain Association CEO Summer Mersinger expects BRCA protections to survive Senate debate. Speaking to Crypto In America, Mersinger said he believes lawmakers will keep the provision intact when they publish the revised text.
Mersinger also predicted that the Senate could hold a floor vote this week, as previously reported by crypto.news. Despite being concerned about whether the measure would attract enough votes, he expressed confidence that lawmakers could still move it through the chamber.
Thune’s admission that no bipartisan agreement is in place, however, indicates that the vote hinges on negotiators settling on more than DeFi language. According to Crypto In America, the White House’s undecided stance on ethics remains an immediate obstacle to the release of the next bill’s text.
As the August recess approaches, Senate leaders face a narrow window to resolve both disputes, publish revised language and build the coalition needed for a floor vote. Polymarket’s 31% probability indicates that traders currently see those unresolved negotiations as a major threat to the bill becoming law this year.
