CLARITY Act setback may delay US crypto launches: Experts

The Senate’s 50-49 failure to advance the CLARITY Act has left crypto firms without a federal market structure framework and could delay product launches, funding decisions, and commercial agreements, according to three industry experts.

CLARITY Act failure leaves jurisdiction questions open

Kyle Bligen, executive director at the Decentralization Research Center, told crypto.news that the Senate result was disappointing but did not remove the need for lasting digital asset rules.

“Congress remains the best route to a comprehensive market structure framework,” Bligen said.

In the absence of federal legislation, Bligen called on the Securities and Exchange Commission and Commodity Futures Trading Commission to use their current powers to give the industry clearer guidance. He cautioned, however, against applying rules built for conventional financial middlemen directly to decentralized systems.

The policy task, according to Bligen, is to protect consumers and counter illegal activity without placing duties on developers or other participants who lack the control needed to carry them out.

“That work cannot stop because the legislative process has stalled,” he said.

The 50-49 Senate vote fell 10 votes short of the 60 required to invoke cloture and begin formal debate on H.R. 3633. Cloture would not have passed the bill into law; it would only have allowed the Senate to proceed with debate.

All participating Democrats opposed the motion, while Republican Senators Susan Collins, Josh Hawley, Jerry Moran and Thom Tillis also voted against it. Tillis changed his vote for procedural reasons, preserving an avenue for the chamber to reconsider the motion.

Disputes over government ethics, stablecoin rewards and banking provisions had continued before the vote. Democratic negotiators delivered a late counteroffer, but lawmakers did not release its complete text before the Senate acted.

The House passed its version of the CLARITY Act in July 2025 by a 294-134 vote, with 78 Democrats supporting the measure. Republicans hold 53 Senate seats, which meant the bill’s supporters needed votes from at least seven Democrats to clear the procedural threshold.

In July, Treasury Secretary Scott Bessent had pressed for a vote after months of negotiations among lawmakers. Polymarket traders assigned the bill a roughly 30% chance of becoming law in 2026 at the time, down from 82% in February. Following the failed cloture motion, the probability dropped to 7% from 31% a day earlier.

Regulatory uncertainty could delay crypto products

Matt Price, head of global partnerships at stablecoin platform WasabiCard, said the vote had left companies with the same classification and jurisdiction questions they faced before the Senate acted.

“The failure to advance CLARITY leaves the industry with the same basic problem it had before the vote,” Price said. “Firms still do not have a clear answer on how some digital asset products will be classified or which rules apply.”

Without a settled division of authority, Price expects companies to spend more time seeking legal advice before putting capital into products. Some firms may hold a launch or commercial agreement because they do not want a regulator to adopt a different view after the product enters the market, he added.

Questions over whether the SEC or CFTC has jurisdiction may also affect funding choices and negotiations between crypto companies, according to Price. He expects some partnerships and releases to be postponed for that reason.

Banks and payment companies could exercise similar caution, Price said, because they need to understand the compliance duties attached to a digital asset project and whether regulators could change the applicable requirements after launch.

“This could slow innovation and adoption in the marketplace,” he said.

The failed vote has also increased pressure on federal regulators. Former CFTC Chair Chris Giancarlo said the SEC and CFTC could continue building rules under their existing mandates, according to a Sep. 16 report.

Coinbase CEO Brian Armstrong made a similar call after the vote, saying the industry could no longer wait for Congress and urging both agencies to use the tools already available to them. Ripple CEO Brad Garlinghouse also asked the regulators to fill the legislative gap.

Agency action cannot resolve every issue covered by the bill. In particular, SEC rules alone cannot establish a statutory split of authority between the SEC and CFTC, according to the Sep. 16 report.

H.R. 3633 remains on the Senate calendar, and Tillis’ procedural vote permits another cloture attempt. Sen. John Kennedy said the measure could return during a lame-duck session after the November elections, while Sen. Ted Cruz described it as “mostly dead.”

Any changes approved by the Senate would still need further House action before the legislation could reach the president. A shortened House calendar has reduced the number of voting days available before lawmakers leave Washington.

Foreign stablecoin rules pose a separate compliance test

Konstantins Vasilenko, co-founder and chief business development officer at MiCA-licensed crypto exchange Paybis, said regulatory uncertainty also extends to stablecoin businesses operating between the United States and Europe.

According to Vasilenko, US authorities are determining how domestic stablecoin requirements will apply to foreign issuers, while European policymakers are considering how to treat oversight conducted outside the European Union.

Under the EU’s Markets in Crypto-Assets regulation, an issuer must show that it holds authorization, manages its reserves and can honor redemption requests, Vasilenko said. The US Treasury’s lawful-order test asks a different question: whether a foreign issuer can execute an American order to freeze assets.

“How far a platform must go to satisfy that check remains open,” he said.

Treasury has raised questions about smart contracts and functions including “freeze,” “seize,” and “burn,” according to Vasilenko. A compliance review can establish whether an issuer has the technical ability and internal process to respond to a lawful order, but it cannot guarantee how the company will respond in every future case, he added.

Vasilenko called on Treasury to state what evidence would satisfy its review. Clear standards would help exchanges and wallet providers assess foreign stablecoins before making them available to customers subject to US rules, according to his comments.

Europe is separately considering how much reliance its regulators can place on supervision performed in another jurisdiction. Vasilenko said mutual recognition should be assessed one requirement at a time rather than granted through a single all-purpose decision.

Where US and EU authorities ask the same compliance question, one answer should be sufficient, he said. When the requirements differ, as they do over the ability to follow a US lawful order, Vasilenko said platforms and issuers would need to complete both checks.