Sen. Gallego Says CLARITY Act Can Still Pass, but Ethics Impasse Puts September Vote at Risk
Sen. Ruben Gallego (D-AZ) said that Congress can still get a landmark crypto markets bill across the finish line, even as unresolved disputes over presidential ethics provisions continue to block the votes needed to advance the legislation through the Senate.
The Digital Asset Market Clarity Act, a 616-page bill known as the CLARITY Act, passed the House in July 2025 with a bipartisan 294-to-134 margin. Senate Majority Leader John Thune filed a cloture motion on August 8, scheduling the next procedural vote for September 15. But the bill remains roughly seven votes short of the 60-vote threshold required to move forward, and the core disagreement that has stalled it since summer has not been resolved.
The Ethics Fight at the Center of the Stall
The dispute hinges on how the bill handles conflicts of interest involving the Trump family's crypto holdings, which include the TRUMP meme coin and the World Liberty Financial platform. Democrats want independently enforceable restrictions on senior officials who hold significant crypto positions. The White House sent back a counterproposal that Gallego publicly rejected in July. In remarks reported by Politico, he said: "Whatever piece of shit they sent back to us, that was not a serious effort." The problem with relying on Department of Justice enforcement, Democrats argue, is straightforward: the DOJ answers to the president, making it a weak check on the president's own financial interests.
Gallego and Sen. Thom Tillis (R-NC) drafted a joint compromise proposal and submitted it to the White House before the August recess. That proposal would require Trump and senior officials to divest any crypto holdings worth more than $1 million that represent at least 10 percent of a company's value. Officials with smaller stakes above $15,000 would need to place those holdings in a blind trust or divest. Crucially, the proposal would allow state attorneys general to enforce the crypto prohibitions on public officials, bypassing the DOJ entirely. As of August 19, the White House had not responded publicly to those terms.
What the Bill Would Do
The CLARITY Act creates a three-category classification system for digital assets. Bitcoin and Ethereum would fall under Commodity Futures Trading Commission oversight as digital commodities. Tokens that function more like securities would go to the SEC. Payment stablecoins would be regulated by banking supervisors. The bill also establishes registration requirements for exchanges, brokers, and dealers, and sets up a federal framework that would override the current patchwork of state-level crypto laws.
Beyond ethics, negotiators still have open disagreements on stablecoin yield rules (opposed by banking industry groups), oversight of decentralized finance protocols, anti-money-laundering safeguards, and the jurisdictional boundary between the SEC and CFTC. The stablecoin yield provisions have drawn particular skepticism from Republican senators Jerry Moran (R-KS) and Mike Rounds (R-SD), both of whom the bill needs given its current seven-vote deficit.
What the Market Is Pricing In
Analyst estimates from outlets including Yahoo Finance and Motley Fool now put the probability of passage before year-end at around 13 percent, down from approximately 50 percent in early August. Bitcoin was trading near $64,736 and Ethereum near $1,917 as of August 19, with ETH up about 2.1 percent on the day. The total crypto market cap stood near $2.18 trillion as of August 2.
Industry voices remain split on the outlook. Summer Mersinger, CEO of the Blockchain Association, said: "I'm feeling pretty good about passage, when this comes up on the 15th." Ryne Saxe, CEO of Eco, put it at "50-50 that it gets done this year."
Coinbase CEO Brian Armstrong, one of the bill's most visible corporate supporters, acknowledged the Senate missed its pre-recess window but expressed continued confidence in Senate leadership. Thune has said the bill is "queued up first thing" when senators return.
Why This Matters Beyond US Borders
The CLARITY Act's outcome carries real weight for crypto users and operators outside the United States. In India, where regulation is split across three bodies (the Reserve Bank of India, SEBI, and MeitY), a finalized US framework would set a global benchmark for asset classification and custody standards. Indian platforms with US institutional clients or capital relationships would face indirect pressure to align with those standards regardless of domestic law, while the country's 30 percent capital gains tax on crypto income and a 1 percent Tax Deducted at Source on crypto transfers remain in force no matter what Washington decides. The bill's still-unresolved DeFi provisions carry a further and distinct risk for India's large developer community: the outcome will determine whether protocol developers building for US-adjacent platforms face direct regulatory liability, a question with immediate stakes given India's significant presence in global DeFi development.
In Africa, the stakes are concentrated around stablecoin infrastructure and cross-border liquidity. Sub-Saharan Africa received approximately $205 billion in on-chain transaction value in the 12 months to June 2025, a 52 percent increase year-over-year. Nigeria alone accounts for roughly 60 percent of Africa's stablecoin activity, driven by naira depreciation and remittance demand. A clearer US regulatory picture for stablecoin issuers would affect the reliability of the dollar-pegged rails that underpin platforms serving African users, including Yellow Card and Chipper Cash. The continent is not waiting passively; eight African nations, among them South Africa, Kenya, Nigeria, and Mauritius, already have operational crypto-specific regulations in place. But US clarity functions as a credibility signal that moves institutional capital, and its absence keeps large-scale liquidity on the sidelines.
What Comes Next
The September 15 cloture vote is now the defining moment for the bill's 2026 prospects. If it fails to clear that threshold, the legislative clock becomes hostile: senators have roughly three weeks of session before an October state work period, and midterm election pressures make organizing a final push for passage before the end of 2026 increasingly difficult. Gallego has continued to voice optimism in public appearances, even as the core ethics dispute that has blocked the bill all summer remains unresolved.