Moderate Democrats led by Kirsten Gillibrand and Ruben Gallego announced plans to restart talks on the stalled CLARITY Act this week, maintaining they remain committed to bipartisan efforts to pass the legislation after two years of work.
The announcement followed a behind-the-scenes effort to reignite discussions before year-end. However, the crypto industry has expressed deep skepticism about the renewed push. Pro-crypto analyst Nate Geraci characterized the effort as "all talk" with no substantive action, citing the Biden administration's record on crypto regulation as evidence of Democratic opposition to the industry.
The bill failed on a procedural vote 49-50 after all Democrats blocked the step needed to advance it, despite expectations that seven moderate Democrats would support passage. The democrats cited limited ethics provisions as their reason for withholding support.
Market participants assigned less than a 30% probability to the bill's passage within the next two years, according to prediction market data. JPMorgan analysts believe the bill remains viable but faces a narrow window for advancement.
In response to the legislative stall, SEC Chair Paul Atkins pledged that the agency would "act decisively within the SEC's statutory authority to deliver certainty for American investors" with or without legislation. The SEC and CFTC have committed to accelerating rulemaking to establish clearer rules for the sector.
The regulatory pathway offers a temporary alternative for the industry, though uncertainty remains about whether a future administration might reverse any new rulemakings.
