Galaxy Research has lowered its estimate for the CLARITY Act's chances of passage in 2026 to 10%, citing unresolved Senate disputes, limited legislative time after the August recess, and stalled negotiations. The market structure bill, which would divide oversight of digital assets between the SEC and the CFTC, passed the U.S. House with bipartisan support in July 2025 and has been the crypto industry's main remaining legislative priority since federal stablecoin rules took effect under the GENIUS Act that same month. The bill remains pending in the Senate, while the SEC and CFTC continue to advance regulatory measures of their own.

Senate Delays Keep CLARITY Act in Doubt

According to Galaxy Research, Senate Majority Leader John Thune did not call a CLARITY Act vote before the recess began on August 7. He later noticed the first vote for when lawmakers return in mid-September.

The September session, however, will be short. Galaxy said the chamber reconvenes on September 14 and plans to adjourn on October 2, leaving lawmakers only about two to three weeks to work. In an election year, Senate business that slips past October typically shifts to a post-election lame-duck session.

Galaxy identified several disputes that have slowed negotiations. These include ethics rules for government officials, pressure from community banks, and changes to developer protections. A bipartisan group of Senate Banking Committee members sent an ethics proposal to the White House on July 30, but Galaxy said the White House has not publicly responded.

SEC Weighs Crypto Exemptions as Bill Stalls

The SEC had planned two regulatory exemptions, according to Galaxy Research. Reg Crypto would create a pathway for public cryptoasset issuance, while the Innovation Exemption would permit secondary trading of tokenized securities through decentralized finance. The agency delayed both measures after earlier plans to publish them.

Galaxy said the SEC may now move ahead as CLARITY Act negotiations remain unresolved. The firm also noted that Commissioner Hester Peirce, a longtime advocate for clearer crypto rules who has led the agency's Crypto Task Force, plans to leave the SEC in November.

Meanwhile, the CFTC has moved to defend its authority over prediction market contracts. This week, the agency issued an emergency order targeting New York Attorney General Letitia James' effort against Kalshi, one of the largest U.S. event-contract platforms as prediction markets expand into sports and political outcomes.

Agencies Move While Congress Works on CLARITY

Galaxy said agency action could provide temporary regulatory coverage while Congress considers legislation. However, administrative measures lack the durability of a law passed by Congress; agency rules and exemptions can be revised by a future commission or set aside in court.

The firm expects the SEC to publish Reg Crypto, the Innovation Exemption, or both within weeks or several months.

Alex Thorn, Galaxy's head of firmwide research, authored the report. The CLARITY Act remains scheduled for Senate consideration after the August recess.