Analysts say the likelihood of the U.S. crypto market structure bill known as the “Clarity Act” passing this year is gradually declining.
The outlook suggests the legislative timeline could be extended longer than expected as controversy over presidential conflicts of interest overlaps with political tensions in Washington.
According to The Block on May 26, Jarrett Seiberg, managing director at TD Cowen’s Washington Research Group, said “the political environment surrounding the Clarity Act continues to deteriorate,” adding that “the prospects for enactment this year remain pessimistic.”
Earlier this month, the U.S. Senate Banking Committee passed the Clarity Act despite opposition from Democrats and the banking industry.
At the time, Seiberg said the move “was not a consensus but rather a shift of the debate to the full Senate floor.”
Analysts say provisions aimed at preventing presidential conflicts of interest remain a central sticking point.
Seiberg also referenced a recent investigative report by The New York Times.
The report alleged that existing regulators were sidelined as prediction markets and the cryptocurrency industry exerted influence over the U.S. Commodity Futures Trading Commission.
However, Seiberg noted the allegations have not been confirmed and said CFTC Chairman Michael Selig told the Times that the agency “is focused on addressing significant violations without favoring any particular industry.”
The New York Times also highlighted ties between the Trump family and several cryptocurrency and prediction market companies.
Seiberg said, “Democrats are pressuring for conflict-of-interest provisions applying to the president before supporting cryptocurrency legislation.”
He added, “Lawmakers may delay action while waiting to see whether the situation stabilizes, but the problem is that there is not much time to spare with midterm elections approaching.”
Seiberg previously projected that if the Clarity Act fails to resolve key issues this year, passage could be delayed until 2027, with final implementation of regulations pushed back to 2029.