Galaxy Research cut its odds of the CLARITY Act becoming law in 2026 to just 10% on August 14. Warning that Senate calendar constraints, unresolved ethics provisions, and bank lobbying have stripped the landmark crypto bill of its earlier momentum.
With Congress now in recess and the SEC and CFTC moving independently to fill the resulting gap. Investors face short-term relief but an elevated risk of policy reversal.
From Bipartisan Hope to 10%: How the CLARITY Act Lost Its Momentum
The CLARITY Act (H.R. 3633) passed the House overwhelmingly in July 2025, and Senate Banking Committee advanced it 15-9 in May 2026.
Odds briefly climbed as high as 75% before a succession of political setbacks began cutting them down.
Galaxy Research Head of Firmwide Research Alex Thorn identified three forces behind the collapse.
First, ethics restrictions on government officials’ crypto holdings reached a deadlock, a bipartisan proposal from Senators Thom Tillis and Ruben Gallego was sent to the White House on July 30.
Second, community banks escalated pressure over stablecoin yield provisions, pulling Republican support.
Third, illicit-finance hawks renewed calls to weaken developer protections under the Blockchain Regulatory Certainty Act (BRCA), adding another layer of uncertainty.
Senate Majority Leader John Thune ultimately declined to call a floor vote before the August recess.
His office did, however, file a cloture motion before lawmakers departed, scheduling the first procedural vote on the CLARITY Act for September 15, the day after the Senate returns.
Senate Cloture Vote Scheduled for September 15 as CoinGape reported, the September window covers only 13 working days before the Senate adjourns for midterm election activity around October 2.
That tight timeline had already been flagged as a critical risk. CLARITY Act Races Clock With 14 Days Left Before Election Recess.
Galaxy’s Thorn said that unless a motion-to-proceed vote succeeds almost immediately upon lawmakers’ return, there is simply not enough floor time for the bill to pass.
Prediction market data tells a similar story. Polymarket puts the probability of President Trump signing the bill into law in 2026 at roughly 17-19%.
A mild rebound from a recent low of 13%, but still deep in skeptic territory. Galaxy Previously Cut CLARITY Odds to 50% Amid Senate Delays, a figure that has since halved twice over.
SEC and CFTC Move Independently, But Agency Rules Carry Reversal Risk
With the CLARITY Act stalling, both the SEC and CFTC are accelerating independent action.
According to Galaxy, the SEC had been deliberately holding back its two flagship crypto exemptions, “Reg Crypto” and the “Innovation Exemption”, partly to avoid interfering with CLARITY’s legislative politics.
Reg Crypto would create a new pathway for primary public issuance of crypto assets.
The Innovation Exemption would allow secondary trading of tokenized securities within decentralized finance.
Bloomberg reported on August 11 that both were imminent, but the SEC again backtracked, canceling its planned open meeting on August 14 just hours after the announcement.
SEC Fast-Tracking Crypto as CLARITY Stalls, Experts Say. Galaxy still expects both exemptions to be published within the next several weeks or couple of months.
The CFTC, meanwhile, issued an emergency order on August 14 asserting federal jurisdiction over prediction market contracts.
They seek to countermand a New York Attorney General bid to block Kalshi from offering event contracts nationwide.
CFTC Moves to Discuss Crypto Regulatory Clarity as CLARITY Act Stalls. The CFTC is also coordinating with industry stakeholders through a dedicated initiative, Project Crypto.
Galaxy’s Thorn is direct on what this means for investors: agency actions “lack the permanence of legislation and could be reversed by a future administration.”
Near-term, clearer fundraising and trading pathways could reduce enforcement risk and support institutional flows.
Longer-term, a change in administration or Congress could unwind every exemption, restoring the very ambiguity the CLARITY Act was designed to end.
On the stablecoin side, opposition from community banks over yield provisions continues to create friction even for Republican senators.
Also, Rural Republicans have sided with banks against stablecoin yields. The administration has restated its commitment to pass a crypto market structure bill in September, per statements from Patrick Witt.
Trump Admin fully committed to passing the crypto bill in September, but as Galaxy frames it, September is now the last realistic chance for 2026 passage.
If it fails, the industry operates under a regulatory patchwork until at least 2027.
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