Congress Recess Plans Throws Another Roadblock up for Crypto Bill

Dow Jones
09/09

The House of Representatives is leaving Washington even earlier than expected next week. That is more bad news for a crypto bill that would shield Coinbase Global and others in the industry from securities enforcers.

Late last week, Republican House leaders announced they would cut two weeks from their September work schedule, instead allowing members to go home early to campaign. That effectively means that House lawmakers have four more days in Washington before the November midterm elections-from next Monday to Thursday.

The move will make life even more difficult for supporters of the Clarity Act, a bill that would take most crypto trading out of the purview of securities laws. Crypto executives have fought for the bill for months, but it has been hung up on Democrats' demand that the bill restrict President Donald Trump's private crypto dealings.

The bill became a top industry priority during President Joe Biden's administration. The Securities and Exchange Commission sued Coinbase and dozens of other crypto firms alleging they weren't following the law, charges Coinbase and the other firms denied. Industry executives argue that most crypto trading should instead fall under the remit of the Commodity Futures Trading Commission and that the bill is needed to clarify rules for the industry and prevent future regulators from renewing the Biden-era crackdown.

The Senate is expected to take a vote on the bill next week. It needs at least 60 votes to avoid a filibuster, which means it would have to get several votes from Democrats. At least right now, GOP lawmakers who have been involved in talks say a deal isn't in the offing.

"If there's no interest in the White House in trying to bridge the gap on the ethics language, it is going to fail," Sen Thom Tillis (R., N.C.).

Trump did agree to a limited ban on his crypto dealings. Democrats have said that offer was a nonstarter, since it would be enforced by Trump's own Justice Department and enforcement would expire at the end of his term.

"The Trump administration has worked tirelessly with Congress on the CLARITY Act and has already agreed to the most comprehensive and wide-ranging ethics provision in history," said a White House spokesperson in a statement.

A failed Senate vote could be a blessing in disguise for the White House and other Republicans, since it would likely ramp up spending by crypto-tied political action committees against Democrats. The crypto industry has amassed one of the largest war chests in the 2026 campaign and could spend it against the bill's opponents before the election.

The White House in August held a rally for the bill that might have had the knock-on effect of helping to turn crypto into a partisan issue.

The crunched House schedule means that even if the Senate did advance the bill, the House likely couldn't take it up until after the election. During that time span, lawmakers could make more demands on the bill, and those who lost their elections could more easily resist the industry's pressure.

If the bill stalls and Democrats take control of the House or Senate, there's a strong likelihood that the issue will be dead for years.

"With Congress' makeup likely to change after the midterms, we don't expect the next Congress to move quickly to revive negotiations on crypto market structure legislation," wrote analysts for Beacon Policy Advisors in a note on Tuesday.

 

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