Trump's crypto conflict of interest controversy weighs down CLARITY Act, cooling prospects for passage this year

Odaily reports that the long-awaited digital asset regulatory bill, the CLARITY Act, has hit a roadblock in its progress. Senate Majority Leader John Thune stated that the Senate is not expected to pass the bill before the August recess.

The CLARITY Act aims to establish a clearer regulatory framework for digital assets, promoting the integration of blockchain and crypto assets into the mainstream financial system. Previously, the bill had undergone multiple rounds of negotiations between the crypto industry and opposing forces such as the banking sector, and was once considered close to passage.

However, the recent controversy over conflicts of interest surrounding President Trump and his family's involvement in crypto projects has become a new obstacle to the bill's progress. Democrats have demanded the inclusion of ethical clauses in the bill that would restrict government officials from profiting from crypto transactions, while Republicans have previously opposed this. Prediction market data shows that the probability of the CLARITY Act passing this year has significantly declined. Polymarket data indicates that as of Friday, the probability stands at around 37%, far below the over 80% level seen in the spring of this year.

Crypto policy institutions and industry insiders believe that the current delay is largely influenced by political factors related to the US midterm elections. Ron Hammond, Head of Policy and Advocacy at Wintermute, stated that the votes to support the bill may still exist, but "electoral politics is louder." He argued that a window for pushing the bill through could still emerge after the November elections.

Analysts point out that if Congress needs to prioritize major issues such as government funding and national defense before the end of this term, the CLARITY Act could be further marginalized. As the US political landscape may shift after the midterm elections, the outlook for crypto regulatory legislation remains highly uncertain. (Fortune)