Crypto industry faces election losses: Is the CLARITY Act now at risk?

The CLARITY Act is the market-structure bill that followed the House's Financial Innovation and Technology for the 21st Century Act, written to split oversight of digital assets between the SEC and the CFTC after years of enforcement-led regulation under Gary Gensler's SEC. Sherrod Brown, the former Senate Banking Committee chair and a persistent skeptic of industry-drafted crypto rules, lost his seat in 2024. His return to a chamber Democrats now control reopens a fight the industry thought it had already won in the House.

Firms lobbying for CLARITY must now court a Senate majority less inclined to accept industry-authored language, and exchanges planning US product launches around a promised federal framework are left without one. Trading venues, custodians and token issuers continue operating under the existing patchwork of state money-transmitter licenses and SEC enforcement actions rather than a unified regime. Ash Crypto's framing of a two-year wait means compliance teams budget for prolonged uncertainty rather than a near-term statute.

TD Cowen's blunt call that a 'crypto-backed' version is now 'impossible' exposes a real tension: a bill shaped to satisfy the industry it regulates may never survive a chamber it doesn't control, yet a bill rewritten to satisfy Democratic critics may lose the support that got it through the House. Whether market-structure law can only pass as an industry wishlist, or must become a genuine compromise, is the argument underneath the vote-counting.

Watch who chairs the Senate Banking Committee once the new Congress is seated, since that choice decides whether CLARITY gets a markup at all or dies in committee. TD Cowen's two-year timeline assumes no floor action before the next midterm cycle; a surprise bipartisan rewrite, or a narrower bill limited to stablecoins, would be the clearest signal that the industry's wait is shorter than analysts currently expect.