TLDR:
- CLARITY Act passage odds have dropped to 10% as Senate negotiations remain unresolved.
- Senate leaders delayed the CLARITY Act vote after political and banking disputes stalled negotiations.
- SEC exemptions could provide temporary crypto rules while Congress struggles to pass legislation.
- CFTC action on prediction markets adds another front to the wider U.S. crypto regulatory debate.
The odds of the CLARITY Act becoming law in 2026 have fallen to 10%, according to Galaxy Research. The Senate delayed action after negotiations failed to resolve several political and industry disputes.
Meanwhile, the SEC and CFTC are advancing regulatory measures while Congress remains stalled. The shift could leave U.S. crypto companies relying on agency action before lawmakers establish permanent rules.
CLARITY Act Passage Faces Senate Roadblocks
The CLARITY Act cleared a bipartisan Senate Banking Committee markup in May, raising expectations for progress before August. However, several disputes later weakened support for the bill among senators.
Galaxy Research pointed to unresolved ethics controls concerning government officials and crypto-related activities. Pressure from community banks also created resistance to provisions involving stablecoin-related business models.
Lawmakers also debated developer protections under the Blockchain Regulatory Certainty Act. Concerns from illicit finance groups added another obstacle during negotiations.
Senate Majority Leader John Thune ultimately declined to schedule a vote before the August recess. The Senate now expects to consider the CLARITY Act after lawmakers return on September 14.
Galaxy Research said the September session leaves limited time for the legislation. The Senate plans to adjourn around October 2 for midterm election activity.
SEC and CFTC Advance Crypto Regulation
The stalled CLARITY Act has coincided with renewed regulatory activity at federal agencies. Galaxy Digital said the SEC had been preparing two major crypto exemptions.
One proposal, called Reg Crypto, would establish a pathway for public cryptoasset issuance. The Innovation Exemption would address secondary trading of tokenized securities within decentralized finance.
Bloomberg previously reported that the SEC was preparing both measures. However, the agency delayed the initiatives following resistance from traditional securities industry participants.
Galaxy noted that the SEC appeared close to releasing the exemptions again this week. The agency later delayed the Innovation Exemption and canceled a planned open meeting.
The CFTC has also intensified efforts around prediction markets and event contracts. The agency issued an emergency order challenging New York Attorney General Letitia James’ attempt to block Kalshi nationwide.
According to Galaxy Research, agency measures could temporarily address regulatory gaps while Congress remains gridlocked. However, those measures lack the durability of legislation and could change under another administration.
Galaxy Research expects the SEC to publish Reg Crypto, the Innovation Exemption, or both within coming weeks or months. The agency’s actions could therefore shape U.S. crypto regulation while the CLARITY Act remains uncertain.
