Kevin O’Leary says Congress will revisit the Clarity Act early next year as a separate crypto tax bill moves forward. The Shark investor spoke at the Avalanche Summit in New York on Thursday, and his reading of the political calendar is blunt: after the midterm elections, the Senate will pick up where the last attempt left off.
The Digital Asset Tax Certainty Act, which passed the House Ways and Means Committee, aims to establish tax rules for staking, mining, small crypto transactions and broker requirements. O’Leary sees that progress as a sign the broader regulatory fight is not over. He told attendees that the tax bill creates an unusual situation where Congress taxes crypto activities before settling broader regulatory questions.
“Once you tax, you’ve got to have policy,” O’Leary said, citing pressure for regulatory clarity on taxed activities like staking.
The Clarity Failure
The Clarity Act failed to pass the Senate earlier this year. It needed 60 votes to overcome a filibuster, and it received 49. O’Leary said the chances of Clarity passing were zero, and that’s what happened.
But he framed the failure as a delay rather than the end of the bill. The legislation sought to establish a broader federal framework for crypto markets, including SEC and CFTC roles. The bill’s defeat did not settle the question of regulation, in his view. It merely postponed it.
What the Tax Bill Does
The Digital Asset Tax Certainty Act is narrower than Clarity. It focuses on tax rules rather than sweeping regulatory authority. That distinction matters to O’Leary, who argues that taxing crypto activities creates a natural demand for clearer rules.
“We’re going to tax staking,” O’Leary said. “You know with certainty that policy’s coming in CLARITY, and it has to.”
His argument rests on a simple point: once Congress collects revenue from an activity, it has a vested interest in defining how that activity works. The tax bill, he believes, will push lawmakers toward resolving the outstanding questions about staking, mining and other crypto functions.
Timing and the Midterms
O’Leary was explicit about the timeline. He said the first or second quarter after the midterms is when the Clarity conversation will resume.
“When will it come? Probably in the first or second quarter after the midterms,” O’Leary said.
That timing suggests the legislative calendar will drive the pace of action. Whether the new political balance determines which bills survive and which stall is unclear, but O’Leary’s prediction is that crypto regulation will be one of the items lawmakers return to quickly.
Why the Tax Bill Matters
The tax bill is advancing through the House, and O’Leary sees it as a stepping stone to a fuller regulatory framework. By establishing tax rules first, Congress is creating a precedent that makes further regulation harder to ignore.
The bill’s path through the House Ways and Means Committee shows that the appetite for crypto legislation exists. The committee advanced the measure, which means it has cleared the first hurdle in the legislative process. Whether it reaches the Senate floor remains to be seen, but O’Leary’s comments suggest he believes it will get there eventually.
The Broader Context
O’Leary’s comments reflect a broader tension in Washington. Crypto advocates want clear rules, and they want those rules to come from Congress rather than from multiple regulators acting independently. The tax bill offers a path to that clarity, even if it arrives piecemeal.
The Digital Asset Tax Certainty Act is a step toward that goal. By establishing tax rules first, it creates a foundation for broader regulatory work. The question now is whether lawmakers can move fast enough to satisfy the industry before the next election cycle resets the clock.
O’Leary’s Position
O’Leary is a vocal advocate for the crypto industry. His public statements have consistently pushed for clearer rules and a stable regulatory environment. He sees the tax bill as a practical path to that outcome.
The logic is straightforward: once Congress taxes something, it has to regulate it. The revenue stream creates a political incentive to define the activity clearly.
The Skeptical View
Some observers have raised concerns about piecemeal legislation leaving gaps between tax rules and regulatory authority. Those concerns are real, but they are not fatal. The tax bill is advancing, and O’Leary’s prediction is that the regulatory conversation will follow.
The key test will be whether lawmakers can move fast enough to satisfy the industry before the next election cycle resets the clock.
What We Know
The facts are clear. The Clarity Act failed. The tax bill is moving. O’Leary expects the Senate to revisit the issue early next year.
The path forward is uncertain, but the direction is set. Congress is moving toward crypto regulation, and the midterm elections will determine the pace. O’Leary’s prediction is that the first or second quarter after the midterms will see renewed attention to crypto regulation.
Whether that attention produces a law is still unknown. But the momentum is clear, and the industry is waiting.
Where the paper stands
The paper backs taxpayers getting a direct say in how crypto taxes are spent and is against money vanishing into a budget nobody voted on line by line. That position applies here too: the tax bill advances through the House Ways and Means Committee, but the regulatory questions it raises remain unsettled, and the bill’s passage alone does not settle them.
O’Leary’s framing — that once Congress taxes crypto activities, it must then define how they work — is a useful observation, but it does not change the core concern. A tax on an activity without clear accompanying rules leaves citizens paying into a budget they did not vote on, line by line.
The paper wants citizens to have a direct say in where such revenue goes, especially when the rules governing the taxed activity are still being hashed out. The tax bill’s path through the House shows appetite for crypto legislation exists, but it also shows the regulatory questions remain unresolved.
Source material: “Kevin O’Leary says Congress will revisit Clarity early next year as crypto tax bill advances,” CoinDesk.
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