Congress has had no results for a year: Delays in the CLARITY Act have caused compliance costs for cryptocurrency businesses to soar.

Written by: Tonya M. Evans

Translated by: AididiaoJP, Foresight News

Last July, Congress promised to address the regulatory jurisdiction of digital assets. A year later, the CLARITY Act is still stuck in the Senate. This delay is no longer just a political story; for boards, general counsels, chief compliance officers, and risk committees, it has become a real deadline for governance, risk, and compliance. As the rulemaking window closes, vacancies at regulatory agencies expand, and enforcement actions fill the void, the core issues of market structure remain unresolved—and are unlikely to be answered before the August recess.

Around this time last year, Washington announced the start of "Crypto Week." The U.S. House of Representatives successively passed three landmark digital asset bills: the CLARITY Act (which clarifies whether digital assets are under the SEC or CFTC), the GENIUS Act (which establishes the first federal framework for payment stablecoins), and the Anti-CBDC Surveillance State Act (passed by a narrow margin of 219-217). The CLARITY Act passed on July 17, 2025, with a vote of 294-134, and the GENIUS Act was signed into law the next day.

A year later, two of those commitments have come to fruition.

The GENIUS Act will reach its first significant rulemaking deadline on July 18. The anti-CBDC clause, which was stalled when it failed to attach to the defense authorization bill, ultimately made it through an unexpected route: the provision prohibiting the Federal Reserve from issuing central bank digital currency before 2030 was included in the 21st Century ROAD Home Act. Although the president declined to sign it due to voting controversies related to the SAVE AMERICA Act, the bill had a veto-proof majority in Congress, and thus automatically became law on July 10 (House: 358-32, Senate: 85-5).

However, the third commitment—perhaps the most influential one—remains stalled in the Senate. Increasingly, outsiders are describing this delay as another example of a partisan deadlock in Congress, but that is not the case. For businesses, the CLARITY Act has long transcended political narrative, becoming a compliance deadline that must be faced.

This is not a single product dispute, but a market-wide issue

The legislative path for the GENIUS Act has been relatively smooth because it only targets a single product within the digital asset economy—payment stablecoins. In contrast, the CLARITY Act seeks to establish rules for the entire market. Stablecoins are just one category of digital assets, and market structure will determine how exchanges, brokers, custodians, issuers, and all institutional participants operate. At the core of the bill is a question that decides everything: does a particular digital asset fall under the securities regulated by the SEC or the commodities regulated by the CFTC? Registration requirements, custody rules, listing decisions, and disclosure attitudes all extend downward from this classification.

Without the CLARITY Act, the classification issue can only be resolved in two ways: by seeing which regulatory agency files a lawsuit first and who takes over the White House. Both answers will reignite the regulatory uncertainty that has plagued the industry and compliance professionals for the past few years. No company can establish a lasting compliance framework based on jurisdictional lines that change with each new administration, nor can any board reasonably price regulatory risk when the identity of regulatory agencies is uncertain. This uncertainty has long become a governance issue for businesses before becoming a transactional issue.

For most large enterprises, digital assets are no longer confined to treasury experiments or innovation teams. Vendor relationships, payment infrastructure, tokenized assets, custody arrangements, and counterparty exposure are increasingly intertwined with enterprise risk management—regardless of whether the institution directly touches tokens.

The biggest regulatory question for the industry is no longer "Will Washington regulate digital assets?" but rather "Will Congress, not regulatory agencies, decide who regulates?"

The Senate window is closing rapidly

The bill has been on the Senate legislative calendar since June 1 and can be voted on at any time, but a vote has yet to be scheduled. Majority Leader John Thune (R-S.D.) has prioritized the National Defense Authorization Act for the week of July 13, which means the vote on the CLARITY Act could be pushed to the week of July 20 or 27—these are the last two windows before the August recess. The House will only be in session until July 23, and there will be only about three weeks of session after returning in September, after which members will fully engage in the midterm elections.

Last weekend, the voting situation tightened further.

South Carolina Senator Lindsey Graham (R) passed away (at the age of 71), and Kentucky Senator Mitch McConnell (R) was absent due to health issues, further weakening the already slim Republican majority. Moreover, the Republican Party is far from united.

Missouri Senator Josh Hawley and Kentucky Senator Rand Paul are the only Republicans who voted against the GENIUS Act. Paul opposes broad federal oversight of the industry, while Hawley is dissatisfied with the bill's lack of restrictions on Big Tech's holding of stablecoins. Galaxy Digital analyst Alex Thorn expects both will also oppose the CLARITY Act. If so, leadership will need support from up to nine Democrats to reach the 60-vote threshold.

Four major controversies and two conditional votes

The Senate Banking Committee passed the bill on May 14 by a vote of 15-9, with Arizona Democrat Senator Ruben Gallego and Maryland Democrat Senator Angela Alsobrooks joining the Republican camp. However, both stated that their votes in the committee were only conditional support, not a commitment for a floor vote.

The four major controversies blocking the bill from obtaining enough votes are:

Ethical concerns

On July 13, Massachusetts Senator Elizabeth Warren wrote to Thune and Minority Leader Chuck Schumer, demanding safeguards to prevent senior officials and congressional members from profiting from the crypto industry. She cited approximately $1.4 billion in crypto-related income in the president's 2025 financial disclosures. The merged committee draft completely removed the ethical clauses, with New York Senator Kirsten Gillibrand stating that enforceable restrictions on officials' holdings are one of the prerequisites for Democratic support. One of the compromise proposals currently being discussed (mentioned by Wyoming Senator Cynthia Lummis) is to allow state attorneys general to sue exchanges that list tokens issued by public officials in violation of the act. However, it is unlikely that Republicans will advance the ethical clauses opposed by the White House.

Opposition from law enforcement

The National Association of Attorneys General expressed to Senate leadership that Section 604 of the bill (the Blockchain Regulatory Certainty Act) would severely impair criminal investigations involving cryptocurrencies. This clause protects non-custodial software developers from becoming subject to money transmission obligations. Oregon Senator Ron Wyden responded on July 8, arguing that developers who have never controlled customer funds should not be classified as money transmitters simply for releasing software. Virginia Senator Mark Warner and Nevada Senator Catherine Cortez Masto have recognized the need for law enforcement endorsement as a condition for their support.

Stablecoin yield loophole

Bank trade groups argue that the bill's wording creates a loophole that allows digital asset platforms to provide rewards equivalent to interest despite the GENIUS Act prohibiting issuers from paying interest. Not all stakeholders are eager to push forward: the American Independent Community Bankers Association even questioned why there was so much rush to promote the bill.

Shortage of regulatory personnel

Under the bill, the CFTC will gain jurisdiction over the digital commodity spot market, but there has been only one commissioner since last December, and the SEC also has two vacancies. Minnesota Senator Amy Klobuchar proposed an amendment requiring at least four CFTC commissioners to be confirmed before the framework can take effect; some committee Democrats have made staffing a condition for the floor vote.

This concern crosses party lines. The bipartisan leaders of the House Agricultural Committee jointly wrote to the president in May, urging the formation of a full commission, believing that only a fully staffed agency can establish more robust rules. This is also a concern for compliance officers: broad rules issued by a single commissioner can easily trigger legal challenges, thereby reintroducing the uncertainty that the bill aims to eliminate.

Delays are creating compliance costs

If the bill fails to pass within this window, the consequences will far exceed the recess period. Lummis warned that a failure now could push back market structure legislation until 2030. In the meantime, "regulating by enforcement" will remain the default policy model, legal expenditures will become structural costs rather than project costs, and timelines for products and collaborations will be extended due to classification uncertainties, forcing boards to make capital allocation decisions based on regulatory guesswork.

Other jurisdictions are not waiting. South Africa is not the world's largest capital market, but its financial sector conduct authority has approved licenses for more than 300 crypto asset service providers (out of a total of 512 applications) under a clear statutory framework, while the U.S. still lacks a permanent answer to the fundamental question of regulatory jurisdiction.

Two paths for compliance leaders, one common task

Conversely, if the bill passes, clearly defined registration paths and statutory digital commodity categories will reward those businesses that have proactively managed their risk exposures. Classifications determined by Congress in a legislative form will not be overturned by the next administration as those decided by regulatory agencies might.

Regardless of the outcome, a cautious stance is consistent. Compliance leaders should immediately inventory all digital asset touchpoints and the underlying classification assumptions, document the rationale to prove due diligence under any regulatory agency, prepare two sets of scenario memos for the board now (rather than waiting until after the vote), and stress-test custody and counterparty arrangements against both frameworks.

A year ago, Washington pledged to bring clarity. Two of the three commitments made during "Crypto Week" have now become law. The final and perhaps most crucial one—that which determines how the entire market will be regulated—remains unfulfilled. The House will hold a hearing on this on the anniversary date.

Whether the Senate can deliver the final piece of the puzzle is beyond the control of any institution. However, whether boards, compliance leaders, and general counsels are prepared for any outcome is entirely in their own hands.