What Happens to Crypto if the CLARITY Act Fails?

Crypto may continue growing if the CLARITY Act fails, but reversible agency rules could leave altcoins and exchanges exposed to a future administration.

The odds that the US Senate will pass the CLARITY Act before its August recess are dwindling. So too are the crypto industry’s hopes for a comprehensive federal regulatory framework.

After

the Senate Banking Committee by a 15–9 vote in May, the bill’s progress stalled. Prediction market

of the bill becoming law this year now hover around 29%, down sharply from a peak of 82%.

The Senate is unlikely to hold a floor vote before its summer recess. Negotiations over ethics rules for government officials remain tense, while supporters are struggling to secure the 60 votes needed to advance the bill.

Polymarket puts the odds of the CLARITY Act passing this year at only 29%. Source: CoinMarketCap

The CLARITY Act would establish a lasting boundary between digital commodities and securities, set registration rules for exchanges, brokers, and token issuers, and give the Commodity Futures Trading Commission (CFTC) exclusive authority over crypto spot trading on regulated platforms.

It would also make the current crypto-friendly regime harder to undo.