Senate Majority Leader John Thune has ruled out Senate passage of the CLARITY Act before the August recess, removing a near-term deadline that crypto industry supporters had viewed as important to the bill’s chances this year.

Fortune reported on July 24 that Thune does not expect the Senate to approve the crypto market structure bill before lawmakers leave Washington. The proposal is part of a broader push to create federal rules for digital asset markets, including clearer lines for how crypto companies are supervised in the U.S. Attention has now shifted to the brief period after the November midterm elections, when Congress will return with government funding measures, defense legislation and other unfinished business also competing for floor time.

Ron Hammond, head of policy and advocacy at Wintermute, told Fortune that the bill still has enough bipartisan support to pass but has been caught in election-year disputes. Hammond said political messaging, rather than a lack of Senate votes, has become the immediate obstacle.

With Democrats preparing to campaign against President Donald Trump and alleged corruption, Hammond expects some lawmakers to avoid supporting a major crypto bill before voters go to the polls.

“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 told Fortune.

Election politics complicate negotiations

A dispute over Trump’s crypto businesses has complicated negotiations, even after Republicans indicated they would consider limits on digital asset activity by elected officials. Senate Democrats have sought provisions to prevent senior government figures from using public office to profit from crypto ventures.

Under the latest draft, ethics restrictions involving Trump and other federal officials would be enforced through the Department of Justice. Several Democratic lawmakers have rejected that structure because the department operates under the executive branch and, in their view, should not have sole enforcement power over a sitting president.

Seven Senate Democrats have also opposed the updated text over ethics, consumer protection and enforcement concerns, according to a July 23 crypto.news report. Republicans hold 53 Senate seats and would need support from at least seven Democrats to reach the 60 votes usually required to advance the legislation. That vote threshold makes a bipartisan coalition essential, even with Republicans controlling the chamber.

Senate Minority Leader Chuck Schumer has encouraged Democrats to focus their midterm message on allegations of corruption involving Trump, Fortune reported. Hammond said that strategy could make Democratic senators less willing to give the administration a legislative victory before November, even if they support federal crypto rules in principle.

Banking groups have added another source of resistance by opposing provisions that could allow rewards on stablecoin holdings. Those associations have warned that such products could draw customer deposits away from traditional banks, reducing funds available for lending.

According to Hammond, banks and other opponents used the extended negotiations to push the bill beyond an important deadline. Their campaign has kept disputes over stablecoin rewards, regulatory authority and ethics controls unresolved as the remaining Senate calendar has continued to narrow.

Goldman Sachs CEO David Solomon, however, has separated his position from banking trade groups seeking tougher restrictions. As reported by crypto.news, Solomon was “very supportive” of advancing the legislation because it would establish a U.S. crypto market structure and give digital asset companies clearer operating rules.

Solomon acknowledged that lawmakers could continue debating parts of the proposal, but argued that Congress should not abandon the broader framework because it remains imperfect. He said the legislation could support market stability and place companies under more consistent rules, though he did not specifically endorse the disputed stablecoin reward language.

Polymarket odds fall to 33%

Crypto executives have continued pressing Congress to act despite the shrinking timetable. Ripple CEO Brad Garlinghouse backed comments from the company’s chief legal officer, Stuart Alderoty, who urged lawmakers not to abandon an achievable bill while searching for a perfect compromise.

Coinbase CEO Brian Armstrong has also said the bipartisan proposal is ready for Senate consideration after months of negotiations, according to crypto.news. Those appeals have not resulted in a scheduled vote, while Thune’s assessment indicates the chamber will enter recess without resolving the remaining disputes.

Prediction-market traders have responded by lowering expectations. Polymarket now gives the CLARITY Act a 33% chance of becoming law in 2026, with more than $2.56 million wagered on the contract. Such contracts reflect where participants are placing wagers at a given time, not an official legislative forecast.

Polymarket’s chart shows the odds climbed above 80% in late February before losing ground over the following months. The probability fell toward 30% in July as ethics disputes, banking opposition and the approaching recess weighed on expectations for passage.

After lawmakers return following the elections, Hammond expects a narrow opportunity in which campaign pressure may ease enough to restart negotiations. Fortune reported that the effort would still compete with funding deadlines and defense legislation, leaving senators limited time to settle the remaining ethics, banking and enforcement disputes.