The crypto industry heads into September with its biggest legislative stakes at stake, with little certainty that proposed legislation will make it across the finish line.
The impending vote on the Cryptocurrency Market Structure bill, known as the Clarity Act, is a key test for an industry that has spent years seeking clearer rules from Washington for digital assets. The bill would establish a framework for virtual currencies, split oversight between the Securities and Exchange Commission and the Commodity Futures Trading Commission, establish registration requirements, and strengthen anti-money laundering protections.
But despite efforts by crypto industry executives and President Donald Trump to get investors and industry watchers excited about the possibility of the bill becoming law before the end of the year, the mood among industry participants is less optimistic.
Many people have given up on the idea that the Clarity Act will be repealed in 2026.
“Personally, I’m a little pessimistic that the Clarity Act will pass,” SALT CEO John Darcy told CNBC at the Wyoming Blockchain Symposium in Jackson Hole in August. “It’s not often that we pass legislation this big in the lead-up to midterm elections.” SALT describes itself as an investment and networking platform and leadership forum.
missed window
The Transparency Act was a missed legislative opportunity for its sponsors, as the Senate adjourned for the August recess without voting on the bill. Currently, Senate Majority Leader John Thune has scheduled a key procedural vote on September 15th, after the Senate returns from recess, which could pave the way for a full House vote.
Unresolved issues include stablecoin rewards and ethics rules related to President Trump and his family’s crypto interests. Sen. Ruben Gallego of Arizona was one of only two Democrats to vote for passage of the bill on the Senate Banking Committee, which is working on a bipartisan compromise on the Clarity Act’s ethics language. Gallego said there is still a chance the bill will pass in the Senate, but Republicans and Democrats will need to find an agreement.
“The way to get 60 votes is to have a good ethics law and also iron out some of the loose ends,” Gallego said during a fireside chat at the Wyoming Blockchain Symposium last month.
Clarity’s possible demise highlights the historic amount of money spent in the 2024 election cycle to change Washington’s position on cryptocurrencies. Crypto-backed political groups have spent over $200 million to help elect industry-friendly candidates and make crypto regulation a mainstream issue.
Betting on deregulation
The bet was simple. If Trump wins and Washington becomes more crypto-friendly, years of regulatory hostility could be replaced.
From a narrow lens, the investment has already paid off, even if Clarity disappears. While the SEC and CFTC have taken a softer stance toward cryptocurrencies under the Trump administration, other regulators, including the Office of the Comptroller of the Currency, a major banking regulator, are also moving toward a looser framework for digital assets.
The Trump administration continues to publicly signal cryptocurrency policy as a priority from the White House. At a crypto summit in August, President Trump said his administration was focused on creating a “clear regulatory framework for pioneers and builders.”
The White House meeting was held at the same time as the Wyoming Blockchain Symposium in Jackson Hole. Industry leaders speaking in Wyoming argued that cryptocurrencies can continue to develop even without the overarching market structure seen in Clarity. SEC and CFTC rulemaking could provide more certainty in the absence of Clarity, executives told CNBC, while companies continue to build and take shape under a more relaxed regulatory framework.
“Contingency plans are already in place,” said Sunaina Tuteja, the Federal Reserve’s former chief innovation officer, noting there are discussions between the SEC and CFTC about what can be done through rulemaking. “It’s not perfect, but it’s still progress.”
Denelle Dickson, chairman of the Stellar Development Foundation, said the industry should spend the next two years improving existing regulations and setting a precedent that will survive the next government. Stellar is a nonprofit organization dedicated to expanding access to global finance using blockchain technology.
Over the next two years, using the rules and standards already coming out from the SEC and CFTC, Dixon said, “we need to do all the flawless work we’ve done so far to show that whatever administration comes in, we’re not only successful, but favorable to preserving this market structure.”
Even as we accept today’s status quo, the industry continues to seek clear rules to reduce uncertainty, provide an upward catalyst for Bitcoin and the broader crypto market, and make it easier for companies and investors to deploy capital.
“When you’re looking to bring capital and invest, one[jurisdiction]has an established framework, and another jurisdiction, like the US… can have rapid and extreme changes every two to four years. It’s difficult (to) allocate capital,” said Andrew McCormick, head of institutional and market development at Chainlink Labs. Formal legislation can provide certainty that it will survive changes in government and political parties, he said.
Former New York Gov. Andrew Cuomo, a member of the OKX board, warned that if the Clarity Act is not passed by the midterm elections, a change in control of the House could lead to years of regulatory conflict. OKX offers spot trading, margin trading, and derivatives trading of digital assets, alongside decentralized financial tools.
“If you believe there’s going to be a change of government, at least in the House, and I believe the Democrats will win the House, then you’re going to have a Democratic Congress overseeing the Trump administration, and you’re going to have regulators making decisions under the scrutiny of a hostile Congress, and that’s not a good place to be because Congress is going to be at odds with the administration,” Cuomo told CNBC at the Wyoming Blockchain Symposium.
After years of operating under an often hostile regulatory regime, the industry may have simply learned how to continue moving forward without the U.S. government providing a definitive framework.
So in the current political climate, passing clarity is considered a major victory. But failure may not prove the setback crypto companies once feared.
