White House Withholds Support for Ethics Provision
President Donald Trump’s White House has not approved the ethics language in the CLARITY Act as of July 20, 2026, despite Trump meeting Republican senators last week to discuss the crypto market structure bill. According to sources cited by Crypto In America, the administration has not explained which ethical limits it would accept. Without a clear position from the White House, Senate negotiators may need more time to prepare an updated version of the legislation, potentially disrupting Republican plans to bring the CLARITY Act to the Senate floor before lawmakers leave Washington for their August recess.
Polymarket Odds Plummet
The uncertainty has weighed on market expectations. Polymarket traders now assign a 31% probability that Trump will sign the CLARITY Act into law in 2026, placing the contract near its lowest level since the prediction market opened. This reflects the stalled progress and unresolved ethical disputes.
Ethics Rules Become Main Barrier in Senate Negotiations
Democratic senators have accused Republicans of keeping them outside recent talks over the ethics provision, according to Crypto In America. Their complaints included a meeting last week that reportedly involved Trump and Republican lawmakers but no Democratic negotiators. Senate Majority Leader John Thune wants to pass the bill before August but has acknowledged that Republicans have not secured a bipartisan agreement. Under Senate rules, the party would need Democratic support to overcome procedural barriers and advance the legislation.
Demand for Restrictions on Officials
Democrats have demanded restrictions on elected officials’ involvement in digital assets, with their concerns focused mainly on Trump’s crypto interests. According to the president’s financial disclosure, his digital-asset ventures generated income last year. Senator Elizabeth Warren has also demanded a financial disclosure from Trump, arguing that senators need the document while considering ethics rules for the crypto legislation. Warren and other Democrats have raised concerns about Trump’s financial ties to the industry. Their proposed safeguards seek to limit the ability of presidents and other senior officials to profit from digital-asset businesses while shaping federal crypto policy.
DeFi Protections Add Another Layer of Conflict
Alongside the ethics debate, the Blockchain Regulatory Certainty Act (BRCA) has continued to divide supporters of the CLARITY Act and law enforcement groups. The BRCA language would protect developers of decentralized protocols from being held responsible for activity carried out by their users. Under the provision, qualifying developers would not automatically be treated as money transmitters merely because they created or maintained decentralized software. Industry groups view that protection as necessary for developers who do not hold customer assets or control transactions. Law enforcement organizations have opposed the provision, arguing that the proposal could make investigations into illicit finance more difficult.
Outlook Uncertain Ahead of August Recess
Blockchain Association CEO Summer Mersinger expects the BRCA protections to survive the Senate negotiations. Speaking to Crypto In America, Mersinger indicated that she believes lawmakers will keep the provision intact when they publish the updated text. Mersinger has also predicted that the Senate could hold a floor vote this week, as previously reported by crypto.news. However, Thune’s admission that no bipartisan agreement exists shows that a vote depends on negotiators resolving more than the DeFi language. With the August recess approaching, Senate leaders face a narrowing window to settle both disputes, publish revised language, and build the coalition required for a floor vote. The House has already passed its version of the bill, but the Senate must approve its own text before the legislation can reach Trump’s desk. Any differences between the two versions would need to be resolved and approved by both chambers. Polymarket’s 31% probability indicates that traders currently see these unresolved negotiations as a substantial threat to the bill becoming law this year.
