The Midterm Elections Have Concluded: What Lies Ahead for the CLARITY Act?
Written by: Zennon Kapron, Forbes
Translated by: Saoirse, Foresight News
Even before the election, the CLARITY Act was already struggling. With the Democrats sweeping control of both chambers in the midterm elections, hopes of salvaging this crypto market legislation before the new Congress convenes have grown exceedingly slim.
On September 15, the Senate voted on a cloture motion for House Bill No. 3633, the CLARITY Act (Digital Asset Market Clarity Act). The result was 49 in favor and 50 against, falling short of the 60-vote threshold by 11 votes, meaning the bill never reached a final substantive vote. However, Senator Thom Tillis filed a motion to reconsider on the day of the vote, allowing the bill to remain procedurally alive, though it has seen no further substantive progress since.
The Democrats will take control of both chambers of the new Congress convening on January 3, 2027, leaving them with little incentive to cooperate with Republicans to advance the current version of the bill during the lame-duck session. Before the 119th Congress concludes, the bill theoretically has only two paths forward: negotiators can revise the text and submit it again for a Senate vote; or relevant crypto regulatory provisions can be bundled into a must-pass December bill. However, the likelihood of either path succeeding remains low.
(Note: A "lame-duck session" refers to the legislative period when the current Congress reconvenes after an election but before newly elected members are sworn in on January 3 of the following year; if Congress chooses to adjourn after the election, no lame-duck session will be held.)
The CLARITY Act Needs 11 More Votes to Pass
The reality behind this recorded vote is far more dire than news headlines framing it as a "single-vote defeat." All 49 yes votes came from Republican members. The 50 opposing votes included every Democratic senator who cast a vote, two independents, and four Republican senators: Susan Collins (Maine), Josh Hawley (Missouri), Jerry Moran (Kansas), and Thom Tillis (North Carolina). Delaware Democratic Senator Christopher Coons was absent. Even if Coons had voted yes and all four rebellious Republicans had switched to support, the total would still only reach 54 votes—still six short of the threshold. To invoke cloture, the bill must win over the Democratic caucus that previously voted against it.
The House already passed the bill on July 17, 2025, with 294 votes in favor and 134 against. At the time, the Senate Banking Committee, chaired by Tim Scott, also released an alternative version on June 1. According to the Congressional Research Service summary, the core compromise of the proposal involves designating the Commodity Futures Trading Commission (CFTC) as the primary regulator for "digital commodities" and their trading platforms, while the Securities and Exchange Commission (SEC) retains clearly defined regulatory authority. The jurisdictional split between the two agencies, along with the ethics provisions added later by the Senate, were the central points of contention throughout the debate.
In a committee statement on September 15, Tim Scott noted that the vast majority of Republican senators voted yes to move the bill forward, stating, "The ultimate failure of the motion stems from the Democratic side of the Senate." He argued that prior to congressional legislation, the SEC and CFTC should issue clear regulatory rules for the digital asset space. Ranking Democrat Elizabeth Warren of the Senate Banking Committee called for a no vote that day. While she acknowledged the feasibility of bipartisan efforts to craft crypto regulation, she bluntly stated that "this version is not acceptable," warning that it poses significant risks to everyday families, the U.S. economy, and national security.
Stablecoin Regulatory Rules Continue to Advance
The setback in September does not mean the crypto industry is entirely cut off from federal statutory regulations. Payment stablecoins already have the GENIUS Act to rely on, and the Office of the Comptroller of the Currency (OCC) has begun drafting supervisory guidelines for stablecoin issuers, which GL Insight covered last month regarding this final rule. The CLARITY Act, however, focuses on a different set of market architecture issues: the legal classification of various tokens, exchange oversight, and the jurisdictional boundaries between the SEC and CFTC. These are precisely the components that failed in the cloture vote and remain unresolved.
Midterm Elections Reduce Likelihood of December Agreement
The Democrats will take control of both the Senate and House next January. On November 9, CNBC projected that out of 435 House seats, Democrats would secure at least 255, while Senate seats could potentially reach up to 56. These figures represent estimate ranges, not final count results.
As of the afternoon of November 10, statistics from 270toWin show that seven Senate seats have already flipped parties, including those in Texas, Ohio, Kansas, and Maine. Two other districts remain incomplete: Alaska, where Democratic candidate Mary Peltola faces Republican Senator Dan Sullivan, with ranked-choice voting set to begin on November 18; and Mississippi, where Democratic candidate Scott Colom currently holds a slight lead over Republican Senator Cindy Hyde-Smith.
Nineteen House districts still await results, with some Louisiana seats requiring runoffs in December. Nevertheless, minor fluctuations in the vote count will not alter the control of either chamber.
Yet the election results have tangibly shifted the negotiation incentives for all sides over the next six weeks. Despite the September vote failing, the Senate Republican majority, which still controls the Banking Committee during the lame-duck session, originally had another chance to push the bill. However, the incoming Democratic administration could simply wait until January to draft an entirely new proposal. Post-election analysis from CNBC directly pointed out that Democrats have "little motivation to compromise" before the new Congress takes its oaths of office.
CNBC reported that Republican Susan Collins, who initially voted no, has already been defeated by Democratic candidate Troy Jackson in this election. This is bad news for attempting another cloture vote in December; the number of Democratic seats in the next Senate will only increase.
Remaining Congressional Legislative Time Is Extremely Tight
The tentative Senate schedule for 2026 is as follows: recess from November 11–13 for Veterans Day; Thanksgiving break from November 23–27; and holiday break from December 21–31. Federal government funding authorization expires on December 11. Whether a short-term continuing resolution or a full-year appropriations bill is needed, each requires 60 Senate votes for passage.
CNBC noted that the House passed the National Defense Authorization Act (NDAA) in July, but Senate Democrats blocked the Senate version at the same time. Senate Minority Leader Chuck Schumer stated that Democrats will not allow the bill to pass if the president "continues to drag America deeper into an Iran conflict." The report also mentioned that Secretary of Defense Pete Hegseth will face impeachment proceedings.
A market architecture bill that already faltered at the cloture stage ranks far lower in priority than government funding and the annual NDAA. Theoretically, it could be attached as a provision to these must-pass bills, but no lawmakers have publicly proposed this plan yet. Meanwhile, the Democratic caucus whose votes are essential for the bill's passage has just secured the initiative to independently draft regulatory frameworks for next January.
Only Two Viable Paths Remain During the Lame-Duck Session
The first path is activating Thom Tillis's motion to reconsider. Under this motion, the Senate wouldn't need to restart procedures and could instead vote directly on the September 15 cloture motion. However, the vote shortfall remains, requiring a net gain of 11 yes votes. Most of these new votes would likely need to come from Democrats who previously opposed it, or from a revised version that Democrats can accept. Elizabeth Warren has previously indicated openness to Republicans coming to the negotiating table to craft a true bipartisan crypto bill. If the new version expands SEC authority and addresses her concerns regarding loopholes in the ethics provisions, it might win over some opposition, but doing so would alter the formal text already approved by the House.
The second path is attaching the negotiated final bill content to a December appropriations bill or the final NDAA. As government shutdown deadlines approach, such must-pass legislation often bundles various ancillary issues. But Democrats only need to wait six more weeks to set regulatory rules on their own. For Republicans to push through a cloture vote, they still depend on Democratic ballots, especially since Republicans have already lost control of the next Senate.
Both paths are procedurally viable under Senate rules but fraught with real-world uncertainties. If neither route succeeds, the outcome is clear: pursuant to the Twentieth Amendment to the U.S. Constitution, the 119th Congress officially concludes at noon on January 3, 2027, and all pending legislation dies. House Bill No. 3633, the Senate committee's alternative proposal, and Tillis's motion to reconsider will all be nullified. Lawmakers will have to reintroduce the bill in the 120th Congress, refer it to committees for review, and craft a completely new crypto regulatory framework.
Democrats May Draft a Cryptocurrency Bill Along Very Different Lines
Post-election reporting has already outlined the broad direction of the new legislation. On November 4, journalist Eleanor Terrett disclosed internal discussions among House Democrats: plans to expand Representative Maxine Waters's amendment, the Crypto Investor and Consumer Rights Act—which was introduced during the 2025 CLARITY Act hearings—into a broader market architecture bill for the next Congress. The new proposal would expand SEC authority while correspondingly narrowing the regulatory scope of the CFTC. This information remains media-reported internal discussion rather than an official bill text, but it aligns closely with Elizabeth Warren's stance in September and fits the scenario of Democrats taking over the relevant committees.
Elizabeth Warren currently serves as the ranking member of the Senate Banking Committee; once Democrats control the Senate, she is poised to become chair, though personnel arrangements have not yet been finalized. The House Financial Services Committee will also be led by a Democrat. The new bill will be primarily drafted and revised by these two committees, no longer spearheaded by Tim Scott. Unless Congress makes separate adjustments, the GENIUS Act remains the effective law for stablecoins. The core of future negotiations will continue to revolve around token classification, exchange oversight, and which federal agency holds primary regulatory authority.
Three Key Watch Items Before January 3
Whether a new cloture vote is scheduled, revised bill text is made public, or attempts are made to attach crypto regulatory provisions to the appropriations bill and NDAA expiring on December 11;
Vote counts in Alaska, Mississippi, and the remaining unfinished House districts will only alter the margin of the Democratic advantage, not shift partisan control;
The new chairs of the Senate Banking Committee and House Financial Services Committee, who will lead the bill rewriting process.
Unless the first scenario above unfolds, the CLARITY Act is effectively dead as a 2026 legislative project. The bill failed in September by a 49–50 vote, and the midterm elections handed the new Congress to the party that overwhelmingly voted against it this time. This lame-duck session is constrained by funding deadlines and defense legislation agendas, leaving a very narrow legislative window. Although procedural options like reconsideration and omnibus bundling exist in theory, no related developments have emerged as of November 12.