Clarity Act at Risk: Crypto Bill Faces Deadline Before Midterms, Warns Galaxy Digital

The Clarity Act, hailed as America’s most significant crypto legislation, is approaching a critical deadline on Capitol Hill. If it fails to pass before the midterm elections in November, its enactment could be delayed for years, warns Alex Thorn, head of research at Galaxy Digital.

“If the markup slips past mid-May, the probability of enactment in 2026 will drop sharply,” Thorn cautioned in a note shared with DL News. “In our view, the odds of Clarity being signed into law in 2026 are roughly 50-50, and possibly lower.”

Polymarket data corroborates Thorn’s warning, showing the Clarity Act’s chance of passage this year has plummeted to 47%, down from 82% in February.

The Senate is currently navigating a packed legislative agenda, including debates over Iran military authorization, unresolved Department of Homeland Security funding, and a backlog of presidential nominations. With the Senate calendar packed until its early August recess, followed by intensified midterm campaigning, the window for passage is narrowing.

If Democrats retake the House in November, legislative progress on the Clarity Act could grind to a halt.

Bipartisan Support Drives Initial Momentum

In July 2025, the Clarity Act cleared the House of Representatives with a 294–134 vote, marking a rare instance of bipartisan agreement. Seventy-eight Democrats joined Republicans in supporting the need for a federal framework for digital asset markets.

Thorn identified four key factors behind this initial bipartisan support:

• Presidential backing: Since regaining the White House, President Donald Trump has championed the crypto industry through executive orders, key appointments, and public events.
• Senate leadership: Senator Tim Scott (R-SC), chair of the Senate Banking Committee, has prioritized crypto legislation, leveraging the committee’s jurisdiction over banking matters.
• Precedent from the Genius Act: The passage of the landmark stablecoin bill in summer 2024 demonstrated that Democrats and Republicans can collaborate on crypto policy.
• Crypto lobbying efforts: The industry has poured over $133 million into pro-crypto candidates in 2024 and continues to do so in the current election cycle, helping to sway skeptics.

“Those conditions may not persist,” Thorn cautioned.

Senate Negotiations Face Key Obstacles

While the House has shown strong support, Senate negotiations have proven more complex. Markup sessions, initially scheduled for January, were delayed due to disputes over stablecoin rewards.

However, stablecoin rewards are not the only hurdle. Galaxy Digital highlights additional flashpoints in the Senate draft of the Clarity Act:

• Blockchain Regulatory Certainty Act provision: This provision clarifies that non-custodial software developers—those who write code but do not control user funds—are not classified as money transmitters under federal law. While crypto advocates argue this is essential for keeping open-source development onshore, law enforcement groups warn it could create investigative blind spots.
• Ethics provisions: Some Democrats are pushing to restrict senior government officials and their families from profiting from crypto holdings while in office.

“No one should be in elective office to profit off their position,” said Representative Ro Khanna (D-CA) in October 2025.

While such amendments may not derail the bill’s passage through committee, they could complicate broader negotiations and reduce its chances of becoming law.