The CLARITY Act failed to advance in the Senate on Tuesday, leaving the crypto industry without a federal law defining digital tokens. Instead, executives are now pinning their hopes on the SEC and CFTC issuing clearer rules through their own administrative powers.
Ripple CEO Brad Garlinghouse responded on X, saying the setback was not fatal for the industry. “There is still reason for optimism for crypto in the United States,” he said. “Now, the SEC, under Chair Atkins, and the CFTC, under Chair Selig, will continue to work hard to issue rules to fill the legislative gap and we will continue to be actively engaged in that rulemaking process.”
The Failure of Cloture
Tuesday’s vote was a cloture vote. It failed. Senator Thom Tillis moved to reconsider the vote, but the outcome of that attempt is still unclear.
The CLARITY Act’s path through Congress is now delayed, though the bill’s fate remains open. A cloture vote is a procedural step that would have forced consideration of the bill; its failure means the Senate did not reach a decision on whether to proceed. The reconsideration motion from Tillis could potentially have changed that outcome, but the article does not report a final result.
What Agency Guidance Actually Means
The SEC and CFTC can issue rules on their own authority. That is what the industry is banking on now. But the path is uncertain, and the stakes are high for firms trying to plan for 2027.
“Rejecting the bill leaves firms completely dependent on agency guidance and ongoing administrative discretion,” said NEAR chief legal officer Abhishek Vaidyanathan. He added that firms setting their 2027 budgets would face another prolonged delay, forcing them back into case-by-case judgments and repeated legal work while counterparties continue to price in regulatory uncertainty.
Bitget Wallet chief operating officer Alvin Kan told Cointelegraph that failure to advance the bill on Tuesday is “continued uncertainty over how securities, commodities and money-transmission rules apply across different products.” The lack of a federal definition for digital tokens means firms must rely on individual judgments about which laws apply to each product they offer.
A Delay, Not a Verdict
Not everyone sees the setback as permanent. Some executives believe the bill can still move forward, though slowly.
“Today’s result is a delay, not a verdict,” 1inch chief legal officer Orest Gavryliak said in comments shared with Cointelegraph. “Legislation of this scale rarely moves in a straight line, and a cloture vote can be brought again.”
But the timeline is tight. The current Congress ends in January, and the November midterm elections loom before that. That means the window for action is closing quickly, and any further attempts at cloture would need to clear both procedural hurdles and political obstacles within a matter of months.
The Odds on Polymarket
The betting market Polymarket shows the pessimism. The odds of the CLARITY Act being signed into law in 2026 fell to 5% on Tuesday, the lowest probability since the market was opened in January.
That number reflects investor sentiment, not a legal determination. It is a measure of how likely the market believes passage is, not a guarantee. The drop to 5% indicates a strong belief among market participants that the bill will not become law within the coming year.
What Comes Next
The next Congress is widely seen as the likeliest window for crypto market structure to be addressed. Vaidyanathan was explicit about it.
“Now that cloture failed, the next Congress is the likely next opportunity to address crypto market structure,” he said. “The House has already canceled its weeks of September 21 and 28, and the Senate’s state work period begins October 5 ahead of the November 3 election.”
That leaves firms in a difficult position. They need clarity to build budgets and contracts for next year, but the legislative calendar is constrained by the election and the end of the current Congress. The canceled House weeks and the Senate state work period mean lawmakers will be focused on campaigning and district work in the run-up to November, leaving little time for new legislation.
The Industry’s Response So Far
Garlinghouse framed the setback as a pause rather than a defeat. His message to the industry was simple: keep working with the agencies.
The contrast between Garlinghouse’s optimism and Vaidyanathan’s caution is stark. One CEO sees a continued path forward with regulators. One legal officer sees the next Congress as the only chance.
Key Facts Box
- The CLARITY Act failed to advance in the Senate on Tuesday
- A cloture vote can be brought again, per Orest Gavryliak
- Polymarket odds of the CLARITY Act being signed into law in 2026 fell to 5%
- The next Congress is the likely next opportunity, per Abhishek Vaidyanathan
- The House has canceled its weeks of September 21 and 28
- The Senate’s state work period begins October 5
The industry has seen its legislative push delayed. The firms that survive this period will be those that can navigate legal ambiguity without collapsing under it.
Get the Notebook.
The day's best stories and every fresh verdict, in plain English, in your inbox by seven. One email a day, no more.