Here’s a more concise, polished rewrite with a sharper editorial tone:

All sides still believe the Clarity Act could pass before the midterms, but the timeline is quickly tightening.

Welcome to State of Crypto, CoinDesk’s newsletter on the intersection of digital assets and policy.

Time is slipping

The Clarity Act missed its informal July 4 target, previously floated by White House adviser Patrick Witt. With July already underway, the window for passage is narrowing fast.

Why it matters

Failure to pass the bill before the midterm elections would inject major uncertainty into its future. A change in control of Congress could lead to revisions or delays, particularly if Democrats push to reshape the legislation. That puts pressure on lawmakers to act within a shrinking 2026 window.

Where things stand

Despite the time crunch, the bill is not considered dead. Multiple sources say there is still cautious optimism it can pass this year.

Even though Congress is spending less time in session over the summer, most of the real work is happening behind closed doors. Staffers continue ironing out differences between Senate committee versions of the bill. Once those gaps are resolved, the Senate could move quickly, potentially passing the bill within days.

The House is also expected to act relatively fast, though uncertainty remains around its ability to do so smoothly.

Recent developments — including a ruling by the U.S. Supreme Court expanding presidential control over independent agencies, and fresh financial disclosures from Donald Trump — are unlikely to significantly derail negotiations.

Ethics fight intensifies

Trump’s latest disclosure showed roughly $2 billion in income for 2025, with about $1.4 billion tied to crypto-related activities. He also reported holding over $100 million in digital assets.

That has amplified Democratic calls for stricter ethics rules in the Clarity Act. Senator Elizabeth Warren said the bill must block senior officials and their families from profiting from crypto.

Senator Ruben Gallego raised similar concerns, emphasizing the need for enforceable standards before supporting the bill on the Senate floor. Lawmakers like Angela Alsobrooks have also made clear that stronger ethics provisions are essential for broader backing.

These provisions are still under negotiation and are expected to be among the final elements resolved, with presidential approval still required.

Structural and political hurdles

The Supreme Court’s recent decision has added another layer of complexity, particularly around control of independent regulators. Democrats continue to push for bipartisan representation at agencies like the SEC and CFTC.

At the same time, broader dysfunction in Congress may slow progress. Reports suggest the House is struggling to move even routine legislation, raising doubts about how quickly it can act on Clarity.

Lawmakers are also juggling competing priorities, including another reconciliation bill and other major legislation. Even if Congress passes Clarity, uncertainty remains over whether Trump would sign it, given delays on other bipartisan measures.

Key deadline

The next major date is August 7, 2026, the final Senate session day before the summer recess and campaign season begin. While lawmakers return briefly in September, focus is likely to shift to other priorities, including the National Defense Authorization Act.

Bottom line

The Clarity Act still has a path forward, but time constraints, political friction, and legislative gridlock are tightening the window. The next few weeks will be critical in determining whether it can cross the finish line before the midterms.