Republican senators are increasingly warning that the CLARITY Act could fail when the Senate returns next week, threatening one of the crypto industry’s biggest legislative priorities just weeks before the U.S. midterm elections. Sen. Mike Rounds, R-S.D., gave a bleak assessment of the bill’s prospects Tuesday, telling Semafor that it “does not look good right now.” Sen. Thom Tillis, R-N.C., was more explicit, warning that the legislation will fail unless the White House helps resolve a dispute over ethics restrictions involving President Donald Trump and his family.
The warnings come ahead of a scheduled September 15 cloture vote on the motion to proceed to the Digital Asset Market Clarity Act. That distinction matters: senators will not be voting on final passage next Tuesday. Instead, they will decide whether to overcome the procedural hurdle necessary to begin considering the legislation.
Ethics Dispute Threatens 60-Vote Threshold
Invoking cloture requires 60 votes. Republicans control 53 Senate seats, meaning the party needs Democratic support even if every Republican backs the measure. Republican defections could make the mathematics considerably harder. Tillis has linked his support to progress on ethics provisions, while Sen. Josh Hawley, R-Mo., has previously threatened to oppose the legislation unless concerns about deposit flight from traditional banks are addressed. Democrats have pushed for restrictions designed to prevent presidents and other senior government officials from profiting from cryptocurrency businesses while in office.
Tillis and Democratic Sen. Ruben Gallego of Arizona previously developed a compromise proposal addressing public officials’ involvement with digital assets. But two Democratic aides told Semafor that little progress has been made on the central ethics dispute. Tillis said that without White House interest in bridging that gap, the bill is going to fail. The White House continues to publicly support the legislation, saying Trump wants Congress to pass the CLARITY Act to preserve U.S. competitiveness in digital assets.
Midterm Calendar Leaves Little Room for Recovery
The legislation is intended to establish a comprehensive U.S. framework governing digital asset markets and clarify jurisdiction between the Securities and Exchange Commission and Commodity Futures Trading Commission. The House passed its version in 2025, but Senate negotiations have become considerably more complicated. Besides ethics, lawmakers have debated illicit-finance provisions, decentralized-finance protections and how Senate Agriculture Committee language should be incorporated into the final framework. Stablecoin rewards have created another significant fight, with banking groups warning that yield-like incentives could encourage deposits to migrate from banks toward stablecoins.
Senate Majority Leader John Thune filed cloture before lawmakers departed for their August recess, setting the September 15 vote for shortly after the Senate reconvenes on September 14. The timing leaves negotiators little opportunity for a last-minute compromise. Failure would become particularly significant because Congress is rapidly running out of legislative days before the November 3 midterm elections. The House’s shortened pre-election schedule creates another obstacle even if the Senate manages to advance its legislation. Because the Senate’s eventual text would differ from the version previously approved by the House, the House would have to act again before legislation could reach Trump’s desk.
The crypto industry is not treating defeat as inevitable. Some lobbyists argue the increasingly pessimistic comments from senators could be negotiating tactics intended to pressure the White House and congressional leadership into concessions before September 15. But the warnings are now coming from Republicans involved in the negotiations themselves. The immediate question is therefore not whether the CLARITY Act can win final Senate approval. It is whether supporters can assemble 60 senators simply to move forward with debate. With negotiations stalled and Republican support no longer guaranteed, that threshold has become the first—and potentially decisive—test for U.S. crypto market structure legislation in 2026.