The CLARITY Act delay is pushing companies toward an impending compliance crisis—not just a deadlocked political situation

Original author: Tonya M. Evans

Original compilation: AididiaoJP, Foresight News

Last July, Congress pledged to resolve the issue of regulatory jurisdiction over digital assets. A year later, today—CLARITY Act is still stuck in the Senate. This delay is no longer just political news; for boards, general counsels, chief compliance officers, and risk committees, it has become a real governance, risk, and compliance deadline. With the rulemaking window closing, regulatory agency vacancies widening, and enforcement actions filling the vacuum, the core question for market structure remains unanswered—and is likely to remain so even before the August recess.

This week a year ago, Washington declared the start of “Crypto Week.” The U.S. House of Representatives passed three landmark digital asset bills in succession: the CLARITY Act (clarifying whether digital assets fall under SEC or CFTC regulation), the GENIUS Act (establishing the first federal framework for payment stablecoins), and the Anti-CBDC Surveillance State Act (passing by a razor-thin margin of 219-217). The CLARITY Act passed on July 17, 2025, by a vote of 294-134, and the GENIUS Act was signed into law the very next day.

One year later, two of the three commitments have been realized.

The GENIUS Act will face its first major rulemaking deadline on July 18. The anti-CBDC provision was once blocked because it could not be attached to the defense bill, but it ultimately made it through via an unexpected route: a prohibition on the Federal Reserve issuing a central bank digital currency before 2030 was folded into the “21st Century ROAD Housing Act.” Even though the President refused to sign due to voting controversies related to the SAVE AMERICA Act, the bill had an override-proof majority in Congress, and therefore became law automatically on July 10 (House 358-32, Senate 85-5).

Meanwhile, the third commitment—perhaps the most consequential—still remains stalled in the Senate. More and more observers have started to frame this delay as another example of congressional partisan gridlock, but that characterization misses the point. For companies, CLARITY Act has long moved beyond political messaging and become a compliance deadline they must confront.

This is not a fight over a single product—it’s a whole-market issue

The legislative path for the GENIUS Act was relatively smooth because it targets a single product in the digital asset economy: payment stablecoins. The CLARITY Act, however, must set rules for the entire market. Stablecoins are only one category of digital assets; market structure will determine how exchanges, brokers, custodians, issuers, and every institutional participant operate. At the bill’s core is one question that determines everything: does a given digital asset belong in the SEC’s jurisdiction as a security, or in the CFTC’s jurisdiction as a commodity? Registration requirements, custody rules, listing decisions, and disclosure posture all flow downward from that classification.

Without the CLARITY Act, classification can only be resolved in two ways: see which regulator files a lawsuit first, and see who occupies the White House. Both answers will reignite the regulatory uncertainty that has plagued the industry and compliance professionals over the past few years. No company can build durable compliance systems on jurisdictional lines that shift with each change of administration, and no board can rationally price regulatory risk when the identity of the regulator is itself uncertain. Before it ever became a trading problem, this uncertainty became a corporate governance problem.

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

The industry’s biggest regulatory issue is no longer “Will Washington regulate digital assets?” but “Who will decide who regulates—Congress, not the regulators.”

The Senate window is closing fast

Since June 1, the bill has been listed on the Senate legislative calendar and could be called for a full vote at any time, but no vote has been scheduled so far. Majority leader John Thune (R-S.D.) has prioritized the National Defense Authorization Act for the week of July 13, which means the CLARITY Act vote could be pushed to the week of July 20 or July 27—two final windows before the August recess. The House will only be in session until July 23; after the September return, there will be only about three weeks of session left, after which lawmakers will fully pivot to the midterm elections.

Over the weekend, the odds of a vote tightened further.

South Carolina Senator Lindsey Graham (R) died at age 71, and Kentucky Senator Mitch McConnell (R) missed the vote due to health reasons—further weakening what was already a narrow Republican majority advantage. And within the Republican Party, it’s far from a unified front.

Missouri Senator Josh Hawley and Kentucky Senator Rand Paul are the only Republicans who voted against the GENIUS Act. Paul opposed broad federal regulation of the industry, while Hawley objected that the bill lacked limits on stablecoin holdings by Big Tech. Galaxy Digital analyst Alex Thorn expects both men to oppose the CLARITY Act as well. If so, leadership may need as many as nine Democrats crossing over for support to reach the 60-vote threshold.

Four major points of contention—and two conditional votes

On May 14, the bill cleared the Senate Banking Committee 15-9, with Arizona Democratic Senator Ruben Gallego and Maryland Democratic Senator Angela Alsobrooks joining the Republican side. But both said the committee vote was only a conditional show of support, not a commitment to a floor vote.

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

Moral concerns

On July 13, Massachusetts Senator Elizabeth Warren sent a letter to Thune and minority leader Chuck Schumer, demanding guardrails to prevent senior officials and members of Congress from profiting from the crypto industry. She cited about $1.4 billion in crypto-related income referenced in the President’s 2025 financial disclosures. The merged draft of the Banking and Agriculture committees fully deleted the moral provisions, and New York Senator Kirsten Gillibrand said enforceable limits on officials’ holdings is one of the prerequisites for Democratic support. One compromise currently under discussion (mentioned by Wyoming Senator Cynthia Lummis) would allow state attorneys general to sue public officials who issue tokens that violate the bill. But Republicans are unlikely to advance moral provisions that the White House would oppose.

Opposition from law enforcement

The National Association of Prosecutors raised concerns with Senate leadership that Section 604 (the “Blockchain Regulatory Certainty Act”) would severely harm criminal investigations involving cryptocurrencies. The provision protects non-custodial software developers from being responsible for obligations related to transferring currency. Oregon Senator Ron Wyden pushed back in a July 8 response, arguing that developers who never controlled customer funds should not be treated as money transmitters merely for releasing software. Senators Mark Warner (Virginia) and Catherine Cortez Masto (Nevada) have indicated law enforcement endorsement is among their conditions for support.

Stablecoin interest-rate loophole

Banking trade groups argue the bill’s wording creates a loophole that would allow digital asset platforms to offer rewards equivalent to interest outside of what the GENIUS Act bans issuers from paying. Not all stakeholders are eager to move quickly: the Independent Community Bankers of America has even questioned why the bill must be rushed through.

Regulatory agency staffing shortages

Under the bill, the CFTC would gain jurisdiction over digital commodity spot markets, but since last December it has had only one commissioner remaining, while the SEC has two vacancies. Senator Amy Klobuchar (Minnesota) proposed an amendment requiring at least four CFTC commissioners to be confirmed before the framework can take effect, and some Democratic members of the committee have already listed staffing as a condition for a floor vote.

This concern cuts across party lines. In May, the bipartisan leaders of the House Agriculture Committee sent a joint letter to the President urging the creation of a fully staffed committee, arguing that only complete agencies can craft more durable rules. This is also a key focus for compliance officers: broad rules issued by a single commissioner are especially likely to invite legal challenges, thereby recreating the uncertainty the bill is intended to eliminate.

The delay itself is already manufacturing compliance costs

If the bill fails within this window, the consequences will go far beyond the recess period. Lummis warns that a failure now could push market-structure legislation to 2030. In the meantime, “regulation through enforcement” will remain the default mode, legal spend will become a structural cost rather than project expenditure, product and partnership timelines will be extended due to classification uncertainty, and boards will have to make capital allocation decisions based on regulatory guesswork.

Other jurisdictions are not waiting. South Africa may not be the world’s largest capital market, but its Financial Sector Conduct Authority has approved licenses for more than 300 crypto asset service providers (512 applications in total) under a clearly defined statutory framework, while the United States still lacks a permanent answer to the foundational question of regulatory jurisdiction.

Two paths for compliance leaders—a shared mission

Conversely, if the bill passes, it will reward companies that have already mapped out their risk exposures. A classification defined by Congress in statutory form will not be overturned the way a classification decided by regulators could be with the next administration.

No matter the outcome, prudent posture remains the same. Compliance leaders should immediately inventory every digital asset touchpoint and the classification assumptions behind it, and document the reasoning to demonstrate that due diligence has been met under either regulator—preparing two sets of scenario memos for the board right now (not after a vote)—and stress-testing custody and counterparty arrangements under both regulatory frameworks.

A year ago, Washington promised clarity. Of the three commitments made during “Crypto Week,” two have become law. The last—and most crucial—one, the bill that determines how the entire market is regulated, is still unfinished. The House will hold a hearing on the anniversary itself.

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