Breaking news! The Clarity Act rushes through Congress, with fierce infighting between parties reaching a fever pitch: On the eve of the July vote, could the ethics provisions be the final stumbling block?

Friends, today let’s talk about what’s going on in the U.S. Congress—specifically, the Clarity bill that the crypto industry has been eagerly waiting for. This thing has been tinkering since the start of the year, and every step along the way feels like dancing on the edge of a knife.

In January this year, Coinbase CEO Brian Armstrong suddenly flipped the table, pushing through a reversal of the bipartisan deal and vote that the Senate Banking Committee had already been discussing. After that, the bill was stuck in the ICU until it was brought back onto the agenda four months later.

This time it could be revived thanks to Maryland Democratic Senator Angela Alsobrooks and North Carolina Republican Senator Thom Tillis, who reached a bipartisan compromise on the “yield” issue. But don’t get too excited—on the Democrats’ side, they added another hard requirement: the need to write ethical clauses into the bill.

During the committee vote in May, only two Democratic senators voted in favor—Alsobrooks herself and Arizona’s Ruben Gallego. Both made their positions crystal clear in their statements: this vote doesn’t mean they will ultimately support the bill—the key is how the ethical clauses are handled.

Alsobrooks’s exact words were: “I’ve been working hard to make the bill better. Let me state clearly: my vote today is to move the work forward in good faith, but that does not mean I will vote yes in the full chamber. We still have work to do.” Gallego was even more direct: “My vote today is to keep working at it. But don’t misunderstand—this doesn’t guarantee my support later. There are many pending issues, and the most thorny one is drawing ethical red lines for elected officials.”

So what happened? The ethics issue never got resolved; the Clarity bill in the Senate Agriculture Committee was ultimately passed along party lines, with not a single Democrat supporting it.

By July’s heat, Republicans hurried to schedule a full-chamber vote. At this point, the demand to add ethical clauses was no longer only coming from Democrats. The yield issue also pushed more Republicans toward the big banks, while law-enforcement agencies strongly opposed provisions meant to protect developers.

Illegal finance and consumer risk have always been core concerns. Last week, two senior senators spoke up. Wyoming Republican Senator Cynthia Lummis emphasized consumer protection on X: “We drafted the Clarity bill to give law enforcement more tools, not fewer. The bill requires exchanges to intercept in real time, freeze illegal funds within hours—not wait for years—and retain all money-laundering charges.”

At a hearing of the Financial Committee, Virginia Democratic Senator Mark Warner discussed bad actors with both optimism and concern: “I want to get this done, and I’m tired of being in ‘crypto hell.’ But we must do it in a way that doesn’t make things worse. I hope the U.S. leads in the digital assets space—if we mess up, the consequences will be just as large.”

Both parties agree that market-structure legislation is needed, but Washington’s hallmark spirit of compromise is now facing major resistance. Still, momentum is building. On July 17, the House Financial Services Committee held an off-site hearing in New York. Lummis and Ohio Senator Bernie Moreno met with White House officials to discuss the bill and explore possible ethical wording.

People across the board are highly expecting reconciliation language from the Senate Banking Committee and Senate Agriculture Committee versions, and it may be released later this week. But some lawmakers are questioning whether it can win enough bipartisan support. In an interview last week, Gallego said: “They went to meet the president with their own version on ethics, not with what we Democrats agreed to… At the end of the day, without strong ethical clauses, I don’t care what the president says. There are no votes from Democrats.”

Congress has legislative authority, and pushing legislation has to rely on Congress. Can Republicans secure from the executive branch an ethics agreement that Democrats are willing to sign? The answer depends on who you ask. Grassroots enthusiasm in the industry is running hot, news coverage is full of speculation, and C-suite executives are generally optimistic. But beyond the noise, what are the crypto community’s short-term goals? Is it a symbolic Senate vote before August recess? Signing into law in 2026 after both chambers pass it? Or achieving it through rigorous debate, forming a framework that includes compromises covering both ethics and banking-related provisions?

Most likely, it’s all of the above. Since the two parties passed the Financial Innovation and Technology Act for the 21st Century (FIT21), substantive work to advance Clarity has never stopped. Now setting clear targets helps clarify the timeline, and when the July sprint hits obstacles, it provides guidance for bipartisan strategy on Capitol Hill. Even though Clarity’s obstacle course is rough, the long and frustrating tradition of counting votes one by one and winning specific members’ support—again and again—is exactly what the crypto industry has time to employ and refine.

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