Galaxy Cuts CLARITY Act Odds to 10% as SEC Pressure Mounts
The chances of the CLARITY Act becoming U.S. law this year have deteriorated sharply, according to Galaxy Research, which on August 14 cut its probability estimate to just 10% after putting the odds as high as 75% in May.
Summary:
- Galaxy Research has cut its estimate for CLARITY Act passage in 2026 to 10%.
- The Senate now has only a narrow September window to advance the legislation.
- The SEC and CFTC are using existing powers to push crypto regulation forward without Congress.
- Galaxy warns agency-level relief cannot provide the permanence of federal legislation.
The fading legislative path is increasing pressure on the Securities and Exchange Commission and Commodity Futures Trading Commission to build parts of a crypto framework through exemptions, interpretations and rulemaking instead. That may provide businesses with regulatory relief sooner, but it creates a fundamental weakness that legislation would avoid: much of the resulting framework could be changed by a future administration.
Galaxy’s CLARITY odds fell from 75% to 10% in three months
The deterioration has been unusually fast.
By August 14, Galaxy Head of Firmwide Research Alex Thorn put the probability at 10%. The estimate is Galaxy’s own policy assessment, not an official congressional forecast.
| Galaxy Estimate | Odds of 2026 Passage | What Changed |
|---|---|---|
| May | 75% | Bipartisan Senate Banking approval |
| June | 60% | Legislative calendar became tighter |
| Late June | 50% | Unresolved negotiations consumed floor time |
| July 24 | 30% | August recess became the practical deadline |
| August 14 | 10% | Senate left without advancing the bill |
The problem is no longer primarily drafting the legislation. It is finding enough votes and enough Senate time to complete the process.
September leaves almost no room for another delay
Senate Majority Leader John Thune filed the procedural paperwork needed to put CLARITY back before senators when they return from recess.
The Senate is due back on September 14 but is expected to leave Washington again around October 2 for midterm election activity. That gives lawmakers roughly two to three working weeks. Unless the motion to proceed occurs almost immediately, CLARITY could need to dominate much of that period to complete debate, amendments and a final Senate vote.
Several disputes remain unresolved. Galaxy highlights ethics restrictions affecting government officials with crypto interests, pressure from banks over stablecoin rewards and continued disagreement surrounding protections for non-custodial software developers.
Passing the Senate would not finish the process. Any Senate version would still need to be reconciled with the House-passed legislation before reaching the president.
The SEC is increasingly building a Plan B
As the legislative route weakens, the SEC is moving toward tools available under existing securities law.
Galaxy points specifically to Reg Crypto, a proposed framework intended to create a tailored route for primary crypto-asset offerings, and a separate Innovation Exemption expected to permit limited experimentation with tokenized securities and on-chain trading.
The SEC came close to formally advancing one part of that agenda this week. Commissioners were scheduled on August 14 to consider whether to publish proposed rules creating a tailored offering regime for certain investment contracts involving crypto assets. The meeting was canceled, however, and the SEC has not announced a replacement date.
READ MORE: White House Crypto Talks Put Market Structure Back in Focus
Galaxy interprets the regulator’s recent urgency as partly connected to CLARITY’s deteriorating prospects. Reg Crypto overlaps with issues addressed by Title I of the bill, while the planned Innovation Exemption touches areas that Congress is also attempting to regulate.
That creates an unusual dynamic: regulatory agencies are beginning to solve individually some of the problems Congress wanted to address through one comprehensive statute.
The CFTC is also testing how far existing authority can go
The CFTC is taking a similar approach.
Its Innovation Advisory Committee will meet on August 20 for a session titled “Crypto’s Regulatory Evolution: From Uncertainty to Clarity.” The official agenda explicitly asks what regulators can modernize under their current statutory authority and where congressional legislation remains necessary.
The agency’s broader Crypto Sprint has already included work on listed spot crypto trading, tokenized collateral, stablecoins and updates to rules covering blockchain-based market infrastructure.
That means a failed CLARITY Act would not return U.S. crypto regulation to where it stood several years ago. The SEC and CFTC can still define significant parts of the market through interpretations, exemptions, registration frameworks and formal rules.
What they cannot easily provide is permanence.
Why agency clarity is not the same as statutory clarity
This is the most important distinction in Galaxy’s argument.
A congressional statute can permanently redraw jurisdictional boundaries between the SEC and CFTC, establish registration obligations and give businesses a framework that survives changes in agency leadership.
Administrative action sits lower in the legal hierarchy.
Galaxy notes that recent crypto policy advances, including SEC no-action positions, joint SEC-CFTC interpretations and OCC guidance for banks, are sub-statutory. A future administration could revise or withdraw much of that policy without needing Congress to repeal a law.
Formal SEC or CFTC rules are more durable than informal staff guidance because changing them generally requires another administrative process. Even so, they remain constrained by the agencies’ existing statutory authority and can face court challenges over whether regulators exceeded it.
CLARITY would address a different level of the problem. The legislation is designed to determine when digital assets fall under securities or commodities law and establish federal requirements for intermediaries trading them.
For institutions making decade-long decisions about custody, tokenization, exchange infrastructure or on-chain securities, that difference matters more than whether regulators are currently friendly to crypto.
The industry could get faster rules but weaker certainty
The paradox is that a struggling CLARITY Act may actually accelerate near-term regulatory action.
Galaxy expects the SEC to publish Reg Crypto, the Innovation Exemption or both in the coming weeks or months, partly because the agency needs time to test the frameworks and eventually convert experimental relief into permanent rules.
That could give crypto companies practical answers before Congress delivers comprehensive legislation. It may also encourage banks, brokerages and exchanges to continue building digital-asset infrastructure during the remainder of the current administration.
The next test comes when senators return in September. If CLARITY cannot secure an immediate procedural vote and a credible path to 60 senators, attention is likely to shift even more heavily toward what the SEC and CFTC can accomplish alone. The resulting U.S. crypto framework could become clearer operationally in 2026 while remaining less secure politically for the years that follow.
The information presented in this article is intended for informational purposes only and should not be interpreted as financial, investment, or trading advice. Coinspress.com does not promote or advocate for any particular investment strategy, asset, or cryptocurrency project. Cryptocurrency markets are highly volatile and unpredictable – always perform your own research and seek guidance from a qualified financial professional before making any investment decisions.
Alexander Zdravkov
Reporter at CoinsPress
Alexander Zdravkov is a market analyst and crypto journalist with interests in economics, broader financial markets and digital assets. His journey into crypto began more than four years ago, driven by a fascination with the rapid evolution of blockchain technology and the transformative potential of decentralized finance. He began analyzing market cycles and identifying emerging trends before they reach the mainstream. He holds a degree in International Relations - a background that helped shape his broader perspective on global economics, geopolitics, and the interconnected nature of modern financial markets. Whether covering the latest developments in the crypto sector or exploring broader macroeconomic themes, Alexander focuses on giving readers context rather than simply repeating headlines. During his career, he has authored more than 10,000 articles covering cryptocurrencies, traditional finance, and global market developments. His work spans everything from Bitcoin and altcoins to macroeconomic trends influencing risk assets worldwide.
