--- title: "With the August deadline fast approaching, the Clarity bill faces even greater challenges in passing." type: "News" locale: "en" url: "https://longbridge.com/en/news/293707408.md" description: "The Digital Asset Market Clarity Act faces legislative hurdles as the August deadline approaches. Key controversies include a contentious ethics clause with alleged loopholes benefiting the Trump family and disputes over enforcement authority, which Republicans want assigned to the DOJ while Democrats oppose this unilateral power." datetime: "2026-07-24T05:42:25.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/293707408.md) - [en](https://longbridge.com/en/news/293707408.md) - [zh-HK](https://longbridge.com/zh-HK/news/293707408.md) generator: "portal-rs" --- # With the August deadline fast approaching, the Clarity bill faces even greater challenges in passing. Author: Little Bear Biscuit; Source: Bitpush With the summer recess approaching, Senate Majority Leader John Thune has pledged to push for a full Senate vote around August 7th, officially putting the Digital Asset Market Clarity Act into its final stretch. On July 22nd, Senate Republicans released a fully updated draft of over 600 pages, merging and unifying the previous work of the Banking Committee and the Agriculture Committee. This bill aims to establish a long-term regulatory framework for the crypto capital markets, decentralized finance, and stablecoins, attempting to end the industry's long-standing period of regulatory ambiguity. However, the legislative process is not smooth. Intense debate surrounding a key "ethics clause" in the draft is escalating, with neither side willing to back down. Some observers worry that if the stalemate continues, this highly anticipated bill may be embroiled in the increasingly close midterm elections, ultimately missing its window of opportunity. On one hand, there's the industry's yearning for regulatory certainty; on the other, there are the legislators' political calculations—whether this bill can pass before the recess remains uncertain. The core controversy: Ethics Clause and the Trump Family's Interests. The most notable change in this updated text is the encryption ethics restrictions negotiated between Lummis and Moreno and the White House without Democratic approval. The White House previously praised it as "the most comprehensive and wide-ranging ethics clause in history" and confirmed that Trump was willing to sign a bill containing this clause. **1\. Scope of Restrictions and Potential Loopholes** The plan prohibits the president, vice president, members of Congress, federal judges, and their spouses or employees from receiving compensation through the issuance or sponsorship of digital assets (such as tokens) during their term of office. Restricted officials must sell their cryptocurrency and shares in crypto companies, or place them in uncontrolled blind trusts; transactions exceeding $1,000 must trigger mandatory disclosure, and the U.S. Government Accountability Office (GAO) will investigate any remaining loopholes. However, critics and Democrats point out obvious targeted loopholes and circumventions in the provision: - Neglects Immediate Family Members: The ban only applies to the official, their spouse, and employees, and does not restrict the official's children or other family members from issuing or sponsoring digital assets, meaning that the president's immediate family members could still profit from crypto projects. The draft bill, while prohibiting officials from using their names, likenesses, images, or official titles to promote digital assets, includes an exemption—if the digital asset was issued before the official took office, the issuer can continue to use their likeness. This exemption is clearly for the Trump family. Trump issued his personal meme coin, $TRUMP, just three days before his inauguration. Forbes estimates that Trump will earn approximately $635 million through $TRUMP alone by 2025, and approximately $800 million through World Liberty Financial, in which he holds a 40% stake (which also issued tokens). Ethics disclosures show that Trump raked in as much as $1.4 billion from crypto projects in the first year of his second term. Senator Warren's office issued a statement saying the new draft bill is "full of loopholes" and will effectively allow Trump to continue profiting through World Liberty Financial. Sunset Clause: This ethics clause has a defined expiration date and will automatically expire on January 20, 2029 (the day the next president is sworn in). 2. Enforcement Authority: A Deadly Point of Contention Between the Two Parties Besides the clause itself, the biggest point of contention is who will enforce it: The Republican and White House proposal: Complete civil enforcement authority will be transferred to the Department of Justice (DOJ) and the Attorney General, with a clear prohibition on state attorneys general intervening in enforcement. For exchanges that illegally list prohibited tokens, the DOJ can impose a fine of up to $250,000 per day for each violation; for the violating official, the DOJ will forfeit illegal gains plus a $500,000 fine or 10% of the illegal gains. Democrats strongly oppose the bill: Senate Democrats believe that having the DOJ solely responsible for enforcement, especially with former presidential lawyer Todd Blanche nominated as Attorney General, is tantamount to building castles in the air. Maryland Democratic Senator Angela Alsobrooks (who had previously supported removing the bill from committee) publicly criticized the bill at the Semafor meeting, calling the unilateral transfer of enforcement power to the Justice Department "absurd, unserious, and outrageous," and emphasizing that given the current state of the DOJ, it should not be relied upon entirely. She and six other Senate Democrats issued a joint statement on Wednesday, clearly pointing out serious deficiencies in the current draft's ethical and enforcement provisions. ## Underlying Market Rules: Preserving Core Consensus Compared to the moral controversies at the forefront, the bill's other core chapters concerning the technology and market structure of the crypto industry remain largely unchanged, and the overall industry assessment is positive:Developer and Self-Custodial Protection: The Blockchain Regulatory Certainty Act (BRCA) continues the version from the Banking Committee in May, explicitly excluding non-custodial developers and underlying infrastructure providers from the definition of "money transmitters"; it also retains the Lummis-Grassley Amendment's criminal liability for knowingly assisting illegal transactions and establishes self-custodial rights through the Keep Your Tokens Act.Stablecoin Yield Compromise: It adopts the Tillis-Alsobrooks compromise, prohibiting the payment of interest on idle payment-type stablecoin balances, but allowing compliant rewards based on network activity. Combating Illicit Finance and Bankruptcy Liquidation: The newly added enforcement chapter establishes cybercrime centers targeting North Korea and Iran, provides funding for local crypto investigations, and requires stablecoin issuers to comply with legal freezing and seizure orders. Regarding the FTX collapse, the bill explicitly stipulates that customer assets must be treated as separate customer property during bankruptcy proceedings and cannot be included in the liquidation assets of the bankruptcy trustee. Industry organizations such as Grayscale stated that the bill will create long-term legal certainty for developers, issuers, and investors, and is a key infrastructure for promoting the large-scale adoption of public blockchains, stablecoins, and tokenized assets (RWA). ## Market Forecasting Data As the legislative window narrows, market participants' expectations for the bill's passage show significant "divergence and rationality." Traders generally assess the "Senate vote" and "final signing into law" stages separately:Senate vote probability: On Kalshi, the contract trading price regarding "whether there will be a Senate vote before the August recess" is around 72%, but due to a trading volume of only $31,000, liquidity is relatively shallow. Final Passage Probability: On Polymarket, the probability of the bill being signed into law by 2026 is approximately 41% (volume $2.4 million); on Kalshi, a deeper money market, the probability is around 42% (volume $3.6 million). Neither of these two deep money markets has priced the final passage rate above 50%, making the market's claim that "the passage rate is already over 50%" a very optimistic expectation. Future Outlook and Time Window: Currently, there are less than three weeks left before the Senate's summer recess: Phase One (late July – early August): Republicans need to reach the 60 bipartisan threshold in the Senate to pass the bill in the full Senate. Negotiations will be extremely difficult due to the need for the support of key Democrats like Kirsten Gillibrand, and the efforts of external left-wing groups (such as Indivisible and Demand Progress) to obstruct Democrats from accepting a "weak moral agreement." Phase Two (September): If the Senate successfully passes the bill, the House of Representatives will take over the consideration of revised versions after reconvening in September. Phase Three (Executive and Regulatory): After the president signs it into law, the CFTC (Commodity Futures Trading Commission) and SEC (Securities and Exchange Commission) will formally begin drafting specific rules. If the bill ultimately fails to achieve a breakthrough before the recess, the crypto industry will have to grope its way forward in vague guidance without long-term legal protection. ## Related News & Research - [The Calmer Co. 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