Original Author: Tonya M. Evans
Original Compilation: AididiaoJP, Foresight News
Congress promised to resolve the issue of digital asset regulatory jurisdiction in July of last year. One year later, the CLARITY Act remains stalled in the Senate. This delay has long ceased to be merely political news; for boards of directors, general counsel, chief compliance officers, and risk committees, it has become a real governance, risk, and compliance deadline. As the window for rulemaking closes, vacancies at regulatory agencies widen, and enforcement actions fill the void, the core question of market structure remains unresolved—and is unlikely to be answered before the August recess.
This week a year ago, Washington declared it "Crypto Week." The U.S. House of Representatives passed three landmark digital asset bills in succession: the CLARITY Act (to clarify whether digital assets are regulated by the SEC or CFTC), the GENIUS Act (to establish the first federal framework for payment stablecoins), and the Anti-CBDC Surveillance State Act (passed narrowly 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 following day.
One year later, two of those promises have been fulfilled.
The GENIUS Act faces its first major rulemaking deadline on July 18. The anti-CBDC provision, once stalled after failing to be attached to a defense bill, was ultimately realized via an unexpected path: a provision prohibiting the Federal Reserve from issuing a central bank digital currency before 2030 was incorporated into the "21st Century ROAD Housing Act." Although the President refused 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).
And the third promise—perhaps the most impactful one—remains stalled in the Senate. This delay is increasingly described as another example of partisan gridlock in Congress, but that is not the case. For corporations, the CLARITY Act has long transcended the political narrative to become a compliance deadline they must face.
This Is Not a Single-Product Fight, It's a Whole-Market Problem
The GENIUS Act had a relatively smooth legislative path because it targeted only a single product within the digital asset economy—payment stablecoins. The CLARITY Act, however, sets the rules for the entire market. Stablecoins are just one category of digital assets; market structure will determine how exchanges, brokers, custodians, issuers, and all institutional participants operate. The core of the bill lies in answering the question that decides everything: Is a given digital asset a security regulated by the SEC, or a commodity regulated by the CFTC? Registration requirements, custody rules, listing decisions, and disclosure postures all flow downstream from this classification.
Without the CLARITY Act, the classification question can only be resolved in two ways: by seeing which regulator files a lawsuit first, and by seeing who occupies the White House. Both answers would reignite the regulatory uncertainty that has plagued the industry and compliance professionals for the past several years. No company can build a lasting compliance system based on jurisdictional lines that shift with each administration, and no board can reasonably price regulatory risk without even knowing the identity of the regulator. This uncertainty becomes a corporate governance issue long before it becomes a trading issue.
For most large corporations, digital assets are no longer confined to treasury experiments or innovation teams. Supplier relationships, payment infrastructure, tokenized assets, custody arrangements, and counterparty exposures are increasingly intertwined with enterprise risk management—whether or not the institution directly touches tokens.
The industry's biggest regulatory question is no longer "Will Washington regulate digital assets?" but "Will Congress, not regulators, decide who regulates?"
The Senate Window is Closing Fast
The bill has been on the Senate's legislative calendar since June 1, available for a full floor vote at any time, but no vote has been scheduled yet. Majority Leader John Thune (R-S.D.) has prioritized the National Defense Authorization Act for the week of July 13, meaning a vote on the CLARITY Act could be pushed to the week of July 20 or 27—the last two windows before the August recess. The House is only in session until July 23, and after reconvening in September, there are only about three weeks left before members fully dive into the midterm elections.
Over the weekend, the voting landscape tightened further.
The passing of South Carolina Senator Lindsey Graham (R) (age 71) and Kentucky Senator Mitch McConnell's (R) absence from votes due to health issues further weakened an already slim Republican majority. And Republicans are far from unified.
Missouri Senator Josh Hawley and Kentucky Senator Rand Paul were the only Republicans to vote against the GENIUS Act. Paul opposes general federal regulation of the industry, while Hawley was dissatisfied with the bill's lack of restrictions on Big Tech holding stablecoins. Galaxy Digital analyst Alex Thorn expects both to oppose the CLARITY Act as well. If so, leadership would need as many as nine Democratic cross-party votes to reach the 60-vote threshold.
Four Disputes and Two Conditional Votes
The Senate Banking Committee passed the bill 15-9 on May 14, with Arizona Democratic Senator Ruben Gallego and Maryland Democratic Senator Angela Alsobrooks joining the Republican side. However, both stated that the committee vote was conditional support, not a promise for a floor vote.
The four main disputes currently blocking the bill from securing enough votes are:
Ethics Concerns
On July 13, Massachusetts Senator Elizabeth Warren sent a letter to Thune and Minority Leader Chuck Schumer, requesting guardrails to prevent senior officials and members of Congress from profiting from the crypto industry. She cited approximately $1.4 billion in crypto-related income in the President's 2025 financial disclosure. The merged Banking and Agriculture committee draft completely deleted the ethics provisions. New York Senator Kirsten Gillibrand stated that enforceable restrictions on official holdings are a prerequisite for Democratic support. One compromise under discussion (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 bill. But Republicans are unlikely to advance ethics provisions opposed by the White House.
Law Enforcement Opposition
The National District Attorneys Association informed Senate leadership that Section 604 of the bill (the Blockchain Regulatory Certainty Act) would severely harm criminal investigations involving cryptocurrency. This section protects non-custodial software developers from money transmission obligations. Oregon Senator Ron Wyden rebutted in a July 8 response letter, arguing that developers who never control customer funds should not be considered money transmitters merely for publishing software. Virginia Senator Mark Warner and Nevada Senator Catherine Cortez Masto have made law enforcement endorsement a condition for their support.
Stablecoin Yield Loophole
Banking trade groups argue that the bill's wording creates a loophole allowing digital asset platforms to offer rewards equivalent to interest, beyond the GENIUS Act's prohibition on issuers paying interest. Not all stakeholders are eager to push forward: The Independent Community Bankers of America even questioned the rush to advance the bill.
Regulatory Agency Staff Shortages
Under the bill, the CFTC would gain jurisdiction over digital commodity spot markets, but it has had 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 takes effect. Some committee Democrats have made staffing a condition for their floor vote.
This concern crosses party lines. In May, the bipartisan leaders of the House Agriculture Committee jointly sent a letter to the President urging the formation of a full commission, arguing that only a fully staffed agency can establish more solid rules. This is also something compliance officers should note: broad rules issued by a single commissioner are highly susceptible to legal challenges, potentially recreating the very uncertainty the bill aims to eliminate.
The Delay Itself is Creating Compliance Costs
If the bill fails to pass in this window, the consequences will extend far beyond the recess period. Lummis warned that failure now could delay market structure legislation until 2030. In the interim, "regulation by enforcement" will remain the default policy model, legal expenses will become a structural cost rather than a project expense, product and partnership timelines will lengthen due to classification uncertainty, and boards will have 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 already approved licenses for over 300 Crypto Asset Service Providers under a clear statutory framework (out of 512 applications), while the United States 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 pathways and a statutory digital commodity category will reward companies that have already mapped their risk exposures. A classification determined by Congress through legislation cannot be overturned by the next administration like a regulatory agency decision could.
Regardless of the outcome, a prudent posture is consistent. Compliance leaders should immediately inventory all digital asset touchpoints and the classification assumptions behind them, document the reasoning process to demonstrate due diligence under either potential regulator, prepare two sets of scenario memos for the board now (not after the vote), and stress-test custody and counterparty arrangements against both frameworks.
A year ago, Washington promised to bring clarity. Two of the three promises from "Crypto Week" have become law. The last and most crucial one—the one that determines how the entire market is regulated—remains unfulfilled. The House will hold a hearing on this on the anniversary day.
Whether the Senate can deliver the final piece is beyond any single entity's control. But whether boards, compliance leaders, and general counsel are prepared for either outcome is entirely in their own hands.
