Washington's most anticipated crypto legislation is running out of road. The Clarity Act, the market structure bill that would establish a regulatory framework for digital assets in the Unite
Washington's most anticipated crypto legislation is running out of road.
The Clarity Act, the market structure bill that would establish a regulatory framework for digital assets in the United States, passed the Senate Banking Committee on May 14 after months of back and forth.
Currently, lawmakers are gunning for the Fourth of July for the final signature from President Donald Trump.
But it is increasingly unlikely to happen this year, according to TD Cowen's Washington Research Group.
Related: TD Cowen warns midterms could delay crypto market structure bill until 2027
Jaret Seiberg, managing director at the firm, shared a blunt message for the essential crypto regulation, as per TheBlock.
"The political environment is getting worse for the Clarity Act. It is why we remain pessimistic that Clarity will become law this year."
Like rain on parade, Seiberg tempered the expectations by noting that the committee vote shifted the fight to the full Senate rather than signaling any real deal had been reached.
The sticking point, according to Seiberg, isn't the legislation itself, but it's the political baggage piling up around it.
A string of recent developments involving the Trump administration has made it increasingly difficult for Democrats to back a crypto bill without demanding stronger conflict-of-interest protections first.
Among the issues cited are a legal settlement between Trump and the Internal Revenue Service (IRS) that created a $1.776 billion anti-weaponization fund, financial disclosures showing around 3,600 stock trades executed on Trump's behalf in the first quarter of 2026, and a New York Times report examining alleged ties between the Trump family and crypto and prediction market businesses.
"It makes it politically hard for a Democrat to back a crypto bill unless it contains conflict-of-interest standards that apply to the President," Seiberg said.
The bind cuts both ways. Republicans may also grow reluctant to bring the bill forward if it forces them to vote against conflict-of-interest amendments targeting Trump.
The result, Seiberg warns, is likely inaction. Lawmakers are waiting for the political noise to die down, with a midterm election leaving little room to maneuver.
Earlier, TD Cowen warned that August might be the only window left for the bill to pass. Once the November elections set in, the bill would not see the light of day until next year.
