The odds of the crypto industry finally getting the CLARITY Act through the Senate have been slipping for practically the entire year. But the clearest sign yet of why it may fail came Tuesday, when Sen. Thom Tillis said the bill is likely doomed unless President Donald Trump’s team shows some willingness to negotiate on ethics restrictions tied to the president and his family’s crypto ventures.

“If there’s no interest in the White House in trying to bridge the gap on the ethics language, it is going to fail,” Tillis told Semafor.

The CLARITY Act is supposed to give the digital asset sector something it has wanted for years: a clearer federal rulebook for when a token should be treated like a security under the SEC’s jurisdiction and when it should be treated more like a commodity overseen by the CFTC. The bill also outlines some protections for developers and sets rules of the road for crypto-involved financial institutions, among other provisions.

From likely win to long shot

For much of the year, crypto circles assumed CLARITY had a real chance of becoming law. Prediction markets reflected that early optimism, but sentiment has since collapsed. Polymarket recently put the odds of the bill being signed into law this year at roughly 14%, down from a peak of over 90%.

At first, the bill got bogged down in a lobbying fight between crypto companies and traditional banks over stablecoin rewards and related provisions, a battle that made it increasingly obvious that the industry was not even fully aligned with itself. In January, Coinbase CEO Brian Armstrong pulled support for an early Senate draft, saying, “We’d rather have no bill than a bad bill.”  That broader fight eventually turned ugly enough that JPMorgan Chase CEO Jamie Dimon said Armstrong was “full of s*it” on the issue.

But even as those banking disputes dragged on, the ethics issue also kept resurfacing as a key unresolved problem. Reuters reported back in March that talks had hit an impasse over a Democratic push to ban elected officials from profiting from crypto ventures, a provision aimed at the Trump family’s World Liberty Financial business. The Hill later described the ethics provision as the “central holdup” in negotiations. By July, Roll Call was also reporting that the revised Senate package still had not satisfied Democrats’ concerns over public officials’ crypto conflicts.

And now the calendar itself is also turning into a major obstacle. House Republican leadership recently canceled the chamber’s planned voting weeks of September 21 and 28, leaving lawmakers with just four voting days after returning on September 14 before heading out until after the midterm elections. The Senate is still expected to hold its first procedural vote on CLARITY on September 15, but even if that cloture vote succeeds, senators would still need to complete work on their version of the bill and then reconcile it with the House version before anything could get to Trump’s desk. In other words, even before Semafor’s new report, the path to a signed law prior to the upcoming midterms already looked extremely narrow.

Republicans are now saying the quiet part out loud

That tougher reality came into sharper focus with Semafor’s new report. Republican senators are warning that the Senate’s bipartisan crypto bill is likely to fail next week, with Senator Thom Tillis going as far as to blame the stall on the White House’s lack of engagement on the ethics issue. Other GOP senators cited a general lack of legislative momentum or constituent interest.

The White House, for its part, tried to project the opposite message without getting into the specific reasons behind the lack of movement on the bill. A spokesperson told Semafor that Trump is “unequivocal: Congress must pass the CLARITY Act so we can stay ahead of foreign competitors and lead the world in innovation.”

Another Republican senator offered an even more revealing quote about the bill’s weak footing. Sen. Roger Marshall told Semafor, “There’s nothing I can do with the crypto bill. Haven’t heard a peep about it. Nobody back home is asking about it.”

For years, the crypto industry has acted as if regulatory clarity for crypto was one of Washington’s urgent unfinished tasks, and that it had real grassroots support. But when a Republican senator says nobody in his state is even bringing it up, it becomes a little easier to understand why leadership may not be willing to spend precious floor time pushing the bill through a messy ethics fight.

The ethics fight did not appear out of nowhere

The reason Democrats have been pushing ethics restrictions is not hard to understand. Trump and his family’s crypto entanglements have become one of the most glaring conflict-of-interest stories in Washington.

A recent report on a Trump-linked crypto venture highlighted how POGO Investigates, a division of the watchdog group Project on Government Oversight (POGO), obtained a Freedom of Information Act response showing the SEC could not find records of an investigation into AI Financial Corporation, the public company that struck a massive deal with World Liberty Financial, the Trump family crypto project, before seeing its stock price collapse. Former senior SEC trial counsel Howard A. Fischer told POGO the situation looked like “the paradigmatic securities fraud case,” while Representative Ro Khanna said the agency “need[s] to investigate.”

These concerns are just the latest in a growing list of perceived conflicts and self-dealing. Other reported incidents include a former DOJ official calling Trump’s pardon of Binance founder Changpeng Zhao “unprecedented corruption”, a UAE-linked firm’s $500 million stake in World Liberty Financial that preceded the approval of advanced AI hardware sales to a connected entity, and crypto entrepreneur Justin Sun’s investments in Trump-linked crypto ventures prior to the settlement of his SEC case. However carefully those arrangements may be dressed up, they have created exactly the sort of political environment where lawmakers start demanding ethics language before handing the industry a major legislative win.

There’s also the sheer scale of the money involved. A Reuters analysis previously found that the Trump family had generated at least $2.3 billion in profit from investors tied to Trump-related crypto projects, while investor losses in those same projects totaled roughly $2.3 billion by the end of April. Another report noted that in 2025 alone, the family reportedly generated $1.4 billion in crypto-related income.

Notably, Hunter Biden is now following in Trump’s footsteps with the launch of his own memecoin, some of which will be airdropped on those who lost money on the TRUMP crypto token, expected this week.

The public itself is not exactly thrilled about all of this. A CoinDesk survey of 1,000 registered voters conducted by Public Opinion Strategies found that 62% of respondents did not trust the Trump administration to handle crypto regulation, while 73% opposed senior government officials more generally holding business interests in crypto.

The industry may still get its policy goals, just not the durable kind

None of this means the crypto industry has been losing across the board. Trump’s administration has already delivered quite a bit. Congress passed the GENIUS Act last year, creating a federal framework for stablecoins, and the SEC under Chairman Paul Atkins has begun rolling out a more permissive crypto framework through regulation rather than legislation.

But that is also why CLARITY matters so much. Rules created through agency interpretation and enforcement priorities can be changed by a future administration. A broader market-structure bill signed into law would be much harder to unwind.

The crypto industry has spent years trying to convert political money into durable legal protection, and it has not been shy about it, going as far as to warn political candidates that resistance is futile. By early July, crypto companies and affiliated political groups had already poured $189 million into influencing the 2026 midterms, according to a Public Citizen analysis. That figure made crypto the largest identifiable source of corporate election spending in the cycle at the time.

If CLARITY stalls until after the midterms (or more problematically into the next Congress), the industry could still keep pushing. But it would mean one of the sector’s biggest Washington projects got tripped up not just by hostile regulators or concerned Democrats, but by the perception of President Trump’s own crypto profiteering and corruption.