With only a week left before the Senate's August recess, the crypto industry's push for market structure legislation is running into a wall of partisan gridlock. Treasury Secretary Scott Bessent used a statement issued July 30 to accuse Senate Democrats of "choosing politics" over passing the CLARITY Act, as prediction markets on Polymarket dropped the bill's odds of passage to a yearly low of 27%.
Bessent Takes Aim at Democratic Holdouts
Bessent did not mince words in his criticism, stating it was "disappointing — but not surprising — that Senate Democrats are choosing politics" over advancing the bill. He went further, questioning whether "American Exceptionalism was once a bipartisan goal," framing the holdout as a broader failure of cooperation rather than a narrow policy dispute.
"It's disappointing — but not surprising — that Senate Democrats are choosing politics."
The Treasury Secretary also defended a related piece of legislation, the Blockchain Regulatory Certainty Act, arguing it "does nothing other than codify longstanding Treasury Department policy" on how non-custodial developers are treated under Bank Secrecy Act obligations.
Why Democrats Are Holding Out
The opposition is not coming from the party's most crypto-skeptical wing alone. Senate Democrats who have previously supported crypto-friendly measures, including Angela Alsobrooks and Ruben Gallego, have withheld their support over ethics concerns, developer protections, and provisions related to illicit finance. That resistance from typically sympathetic lawmakers has made the bill's math considerably harder for Republicans, who are estimated to have roughly 49 votes lined up and need at least 11 Democratic votes to clear the Senate's 60-vote threshold.
An Ethics Deal in the Works
Behind the scenes, Senators Thom Tillis and Ruben Gallego have been negotiating an ethics-focused compromise that would incorporate oversight from state attorneys general — an attempt to address one of the core Democratic objections. Even so, Republican Senator Josh Hawley remains a holdout on his own side of the aisle. Senator Cynthia Lummis characterized overall Republican support as "very high" while acknowledging Hawley's continued resistance complicates the vote count further.
Markets Are Pricing In Failure
The compressed timeline is showing up directly in prediction markets. Polymarket odds for CLARITY Act passage have fallen to 27%, a record low for the year, as traders weigh the narrowing legislative window against competing priorities at the White House. With the August recess now just days away, the bill's path forward increasingly depends on whether the Tillis-Gallego ethics framework can peel off enough Democratic votes before time runs out.
