Summary: House recess over Epstein standoff stalls crypto policy push until September

Epstein Files Controversy Unintentionally Halts Key Crypto Policy Push in Congress! A tense standoff over the release of Jeffrey Epstein-related files has unexpectedly forced the House of Representatives into an early August recess, effectively stalling significant crypto policy initiatives until September. Speaker Mike Johnson’s decision on July 24 to adjourn a week ahead of schedule means no new legislative action will resume until at least September 8. This abrupt halt directly stems from an intensifying debate surrounding Rep. Ro Khanna’s proposed amendment to mandate the Justice Department's swift release of Epstein documents. While the House Rules Committee narrowly rejected the amendment, the continued dispute led to the early adjournment. Crucially, not all crypto legislation is impacted. Established bills like the stablecoin-focused GENIUS Act, which has already cleared Congress and received presidential signature, remain unaffected. Similarly, the CLARITY Act, defining SEC/CFTC jurisdiction, and the Anti-CBDC Act, prohibiting a central bank digital currency, have already passed the House and are now before the Senate for consideration. However, the early recess has directly stalled two pivotal crypto-related legislative efforts. Most notably, anticipated digital asset tax legislation, currently in its drafting phase, faces an indefinite delay. Lawmakers had recently engaged in vital discussions to update outdated frameworks for crypto taxation, considering proposals for de minimis exemptions for small transactions, clarifying staking reward treatment, and revising wash-sale rules. This much-needed reform is now deferred until Congress reconvenes. Furthermore, the Veterans Affairs Distributed Ledger Innovation Act of 2025 (H.R. 3455) is procedurally frozen. This bipartisan bill, introduced by Rep. Nancy Mace, seeks to mandate a comprehensive study into how blockchain technology could drastically improve VA benefits claims processing and enhance transparency. Having passed a subcommittee, it now awaits crucial full committee markup and a House floor vote, all of which are on hold. The Epstein controversy has inadvertently created a significant legislative vacuum for new crypto policy, leaving vital advancements in digital asset regulation and blockchain innovation in limbo until autumn.