The crypto industry’s push for the CLARITY Act, legislation intended to establish a more predictable regulatory framework for digital assets, has hit another obstacle after nearly a year and a half of lobbying and negotiations. Until this week, many industry leaders believed the bill was close to advancing after a series of difficult compromises with the banking lobby and other skeptics of crypto policy. On Thursday, however, the timeline shifted again.

Senate Majority Leader John Thune (R-ND) told reporters that he did not expect the Senate to pass the measure before lawmakers leave for the chamber’s August recess, a development that surprised many in the crypto industry. The Senate could still act on the bill before the current Congress ends its term in early January, but the delay compresses the legislative calendar and leaves the measure competing with election-year messaging and must-pass bills. The politics surrounding the approaching mid-term elections could make passage more difficult.

Prediction markets indicate waning expectations that the CLARITY Act will become law this year. On Friday, the odds on Polymarket were around 37%, well below levels seen earlier in the summer and far under points this spring when the odds rose above 80%.

The core provisions of the CLARITY Act have bipartisan support and would place blockchain networks and digital tokens more firmly within the framework of mainstream finance. That is the central issue for crypto firms seeking clearer federal rules, as well as for banks and other financial institutions weighing how digital-asset activity should fit within existing regulatory boundaries. But the legislative process has become bogged down by scrutiny of President Donald Trump’s crypto-related ties. Those connections have helped the first family bring in more than $2 billion from memecoin sales and other crypto deals, according to the source article.

Democrats have responded by seeking to draw attention to what they regard as a clear conflict of interest involving Trump. They are also pushing for the CLARITY Act to include ethics provisions that would restrict such deals. At first, that type of provision appeared to be a non-starter among Republicans after Trump signaled his complete opposition. Over the past week, however, the Republican position appeared to shift, resulting in a new draft of the bill that included language aimed at preventing elected officials from profiting from crypto. Skeptics said the proposed provisions appeared to include significant loopholes.

The exact wording of the bill, including the ethics language, remains in flux. For now, the formal legislative process is effectively stalled. Ron Hammond, head of Policy and Advocacy at crypto firm Wintermute, said the CLARITY Act’s path has been further complicated by a recent directive from Senate Minority Leader Chuck Schumer (D-NY). That directive instructed Democrats to center their mid-term messaging on President Trump and alleged corruption, a strategy Hammond said will make Democrats more reluctant to support the crypto legislation.

Hammond, a longtime participant in Washington, DC crypto policy debates, also said the delay announced by Thune this week reflected a successful strategy by banks and other crypto opponents to prolong debate over the CLARITY Act and slow its passage. Still, he remained somewhat optimistic about the bill’s chances.

“The votes are there, but the election politics are louder. The latter will dissipate after November and that’s a narrow but very possible window,” Hammond said.

The outgoing Congress often passes a package of bills before its term ends in early January, but lawmakers still face major unresolved legislative issues involving government funding and defense. Those priorities could leave less room for the crypto industry’s favored legislation. If the bill does return after the elections, the details to watch will include whether the ethics language is tightened, whether Republican support holds, and whether Senate leaders are willing to spend floor time on the measure.

After November’s elections, the political environment for crypto legislation could change substantially if Democrats are positioned to retake the House of Representatives and gain seats in the Senate.

This story was originally featured on Fortune.com.