The White House has not answered a bipartisan Senate ethics proposal meant to unblock the CLARITY Act, and prediction-market traders now give the crypto market-structure bill just a 27% chance of becoming law this year. With no cloture motion filed and the Senate's recess approaching, Bernstein warns that a further delay could trigger another sell-off across crypto markets.
The CLARITY Act has stalled in the Senate after the White House failed to respond to a bipartisan ethics counterproposal. Polymarket traders now put the bill's odds of becoming law in 2026 at 27%. That is down from a market that had climbed above 80% in February before Senate delays and ethics disagreements weakened expectations.
White House stays silent on ethics deal
Crypto journalist Eleanor Terrett reported Monday that the White House had yet to respond to the ethics counterproposal Republican Sen. Thom Tillis and Democratic Sen. Ruben Gallego submitted the previous Thursday. The proposal would reportedly give state attorneys general a role in enforcing restrictions on crypto activity involving federal officials, and under the compromise, state officials could sue the Department of Justice if it failed to enforce the ethics rules.
Democrats opposed an earlier version the White House had accepted because it left enforcement solely to the DOJ. The Tillis-Gallego plan is meant to address those concerns and win enough Democratic votes to move the bill forward. The reported silence concerns the White House's response to the compromise, not the president signing anything — the bill still must pass the Senate and clear differences with the House before reaching his desk.
Senate timetable narrows as recess nears
Senate Majority Leader John Thune has not filed a cloture motion for the CLARITY Act, leaving lawmakers little time to start the procedural process before the chamber's expected recess. Monday's published schedule instead listed a cloture vote on H.R. 6500, a continuing-resolution vehicle, with no scheduled action on H.R. 3633, the Digital Asset Market Clarity Act. Even if Thune files cloture, the bill would still need 60 votes to overcome a likely filibuster, requiring support from several Democrats.
A separate dispute also persists: prosecutors and law enforcement groups have raised concerns over provisions shielding some non-custodial blockchain developers from Bank Secrecy Act registration. Treasury Secretary Scott Bessent has rejected that reading, arguing non-custodial developers were never subject to those obligations and that the bill would codify existing Treasury policy.
Bernstein warns of another sell-off
Bernstein analysts warned that a Senate failure to advance the bill could trigger an immediate decline in Bitcoin and the broader crypto market, describing the risk in a Monday client report as an industry "knee-jerk" sell-off. The analysts said they expect the market to bottom and build momentum toward late Q3 and early Q4, ahead of the midterm elections.
A delay could also pressure the SEC and CFTC to issue more guidance through Project Crypto, covering token classifications, decentralized finance and a possible exemption for qualifying token issuances. Such guidance would offer only temporary relief, lacking the permanence of a law passed by Congress.
Source: crypto.news
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