Galaxy Research has sharply cut its estimate for the CLARITY Act becoming law in 2026 to just 10%, citing Senate time constraints, unresolved ethics rules and growing opposition from banks. The crypto market structure bill had earlier appeared to have strong momentum, but that has faded in recent weeks.
With Congress now in recess, the SEC and CFTC are moving ahead with their own regulatory actions to fill the gap. These actions could provide investors with some temporary certainty, but they might also result in regulations that are easier to change than laws.
In July 2025, the House overwhelmingly approved the CLARITY Act, formerly known as H.R. 3633. By a vote of 15–9, the Senate Banking Committee also passed the bill in May 2026. At one point, 75% of people anticipated that the idea would become law in 2026.
That optimism has drastically decreased since then. Alex Thorn, head of firmwide research at Galaxy, pointed to three major issues behind the decline.
The first involves ethics rules covering government officials’ crypto holdings. A bipartisan proposal from Senators Thom Tillis and Ruben Gallego was sent to the White House on July 30, but the issue remains unresolved.
The second problem is coming from community banks. Banks have increased pressure over provisions that would allow stablecoins to generate yields, leading some Republican lawmakers to reconsider their support for the bill.
The third issue concerns illicit finance. Lawmakers who want tougher measures against crypto-related financial crime are pushing for changes to developer protections under the Blockchain Regulatory Certainty Act. That has added another point of disagreement to an already complicated legislative process.
Senate Majority Leader John Thune did not schedule a floor vote before the August recess. His office did, however, file a cloture motion, setting the first procedural vote for September 15, shortly after the Senate returns.
That leaves lawmakers with very little time. The Senate is expected to have only about 13 working days before it begins its midterm election-related break around October 2. Galaxy’s Thorn has warned that unless lawmakers move quickly after returning, there may not be enough time to complete the process.
Prediction markets are also reflecting the uncertainty. Polymarket currently places the probability of President Donald Trump signing the CLARITY Act into law during 2026 at roughly 17% to 19%. That is somewhat higher than a recent low of about 13%, but still far below the levels seen earlier in the year.
The delay is also encouraging the Securities and Exchange Commission and the Commodity Futures Trading Commission to act more independently.
Galaxy expects the SEC to move forward with two proposed crypto exemptions known as “Reg Crypto” and the “Innovation Exemption”. Reg Crypto would create a new route for primary public issuance of certain crypto assets, while the Innovation Exemption would provide a framework for secondary trading of tokenised securities in decentralised finance.
The SEC was reportedly preparing to move on the exemptions, but it cancelled a planned open meeting on August 14. Galaxy nevertheless expects the proposals to emerge over the coming weeks or months.
The CFTC has also stepped up its activity. On August 14, the agency issued an emergency order asserting federal jurisdiction over prediction-market contracts. The move came as the CFTC sought to counter a New York attorney general effort to prevent Kalshi from offering event contracts nationwide.
The agency is also working with the crypto industry through Project Crypto, another sign that regulators are trying to address issues that Congress has yet to settle through legislation.
LATEST: 🇺🇸 Galaxy Research has cut its odds of the CLARITY Act passing in 2026 down to just 10%, citing unresolved disputes around ethics and stablecoin yields. pic.twitter.com/Spu0IynAa9
— CoinMarketCap (@CoinMarketCap) August 17, 2026
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