Washington Hits Snooze on CLARITY, Crypto Lobbyists Brought a Thermos of Patience

The CLARITY Act will not be advancing through Congress before the November midterm elections after the U.S. House of Representatives cancelled its sessions for the recess, leaving the crypto market structure bill in legislative limbo. On September 15, the Senate voted 49-50 not to invoke cloture on motions to proceed with the bill, falling short of the 60 votes required to begin debate. The measure was defeated after a Republican counterproposal was rejected by Democrats, with other Democrats who had been involved in earlier negotiations also opposing it. The procedural failure did not constitute final rejection by the Senate.

House Majority Whip Tom Emmer framed the outcome as a postponement rather than a terminal blow to the legislation. "Very disappointing they did not get this passed yesterday or get the process started but I don't think it spells doom," Emmer said in an interview. He added, "It just delays it until after the midterms. You see the CLARITY Act after the midterms and get it done before the end of the year." His comments align with remarks from Shark Tank investor Kevin O'Leary, who said at the Avalanche Summit in New York on Thursday that he expects lawmakers to return to the bill in the first or second quarter after the midterms, regardless of which party controls Congress.

O'Leary pointed to separate tax legislation as the lever that will pull market structure back into focus. The House Ways and Means Committee advanced the Digital Asset Tax Certainty Act this week, a bill that seeks to establish tax rules for staking, mining, small crypto transactions and broker requirements. "Once you tax, you've got to have policy," O'Leary said, arguing that Congress's move toward taxing activities such as staking will create pressure for broader regulatory clarity. He stated, "We're going to tax staking. You know with certainty that policy's coming in CLARITY, and it has to."

On Wall Street, Bitwise Chief Investment Officer Matt Hougan walked back his own January warning that a CLARITY Act failure could stall the 2026 crypto bull run. In a September 16 client memo, issued one day after the Senate's 49-50 cloture miss, Hougan called the defeat "a speed bump, not a roadblock." Hougan cited a divergence between Bitcoin's price and the bill's legislative odds. $BTC bottomed at $57,950 on July 1 and rose above $80,000 by September 4, while Polymarket odds of 2026 passage fell from 39% to 18% over the same stretch. Hougan now points to SEC Chair Atkins and CFTC Chair Selig as the trade, arguing that agency-level rules could prove more pro-crypto than the CLARITY Act itself.