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TD Cowen put a number on it. Seventy-five percent. That’s the firm’s assessed probability that the CLARITY Act won’t become law this fall — a blunt read on legislation that’s been crawling through Congress for over a year and still can’t find solid ground in the Senate.
The bill, which tries to draw a clean line between SEC and CFTC jurisdiction over digital assets, cleared the Senate Banking Committee with a 15-9 vote. That sounds decent. But a committee vote and a Senate floor vote are two very different animals, and right now the floor looks like a minefield.
The scheduled date is September 15.
What’s Actually Blocking the Bill
The core fight is over who regulates what. Under the CLARITY Act, digital commodities would fall to the CFTC. Investment contracts stay with the SEC. Simple enough in theory. In practice, that split has triggered months of back-and-forth between the two agencies, their congressional allies, and an industry that can’t quite agree on what it wants either.
Democrats aren’t playing along quietly. They’re pushing for changes to the ethics provisions and the Bank Secrecy Act sections of the bill. If Republicans block votes on those amendments, Democrats can basically refuse to let debate close — and the whole thing grinds to a halt. Senator Cynthia Lummis has released updates to the Act, but those haven’t bridged the gap. Not yet, anyway.
There’s also a messier political problem. Some Republican senators may want to sidestep a confrontation over President Donald Trump’s crypto holdings and the opposition coming from law enforcement groups. Majority Leader John Thune has filed cloture, which is the procedural move to force a vote, but filing cloture doesn’t guarantee anything actually happens. A September 15 agreement would reduce that risk. Probably. It’s still not locked in.
And then there’s stablecoins. The question of whether digital asset providers can offer a return on stablecoins has split senators and the banking industry pretty sharply. That one dispute alone has the potential to tank negotiations that might otherwise have a shot.
The “Walking Dead” Scenario
Industry watchers have a name for the outcome they fear most: the “walking dead” state. It works like this — the bill gets an initial procedural win, maybe clears the first cloture motion, and then just… stops. No amendment votes. No further debate. No additional motions. The bill technically lives but goes nowhere, while regulators keep building parallel rules on their own timeline.
That’s not a hypothetical. It’s happened before with complex financial legislation, and the CLARITY Act has enough unresolved pieces — registration rules, disclosure requirements, how exchanges and custodians fit into the framework — to make stalling very easy.
The prediction markets aren’t optimistic either. As of August 9, traders put the probability of the CLARITY Act becoming law by 2026 at around 21%. TD Cowen’s own 25% chance of passage lines up pretty closely with that read, which is either reassuring or depressing depending on your position.
The Narrow Paths Forward
TD Cowen does lay out scenarios where the bill actually passes. One: Democrats get a vote on their ethics amendment, it fails, but enough of them decide to support the bill anyway and it moves forward with bipartisan backing. That’s a real path, though it requires a level of goodwill that’s been hard to find lately.
Another scenario involves a direct deal between President Trump and Democratic senators — something that secures enough votes to end debate and push the bill through. TD Cowen flagged it as less likely. Much less likely, honestly, but not impossible.
The fall session kicks off September 14. Republicans need bipartisan support to clear even the first procedural hurdle. They don’t have it locked up. The math is tight, the politics are messy, and the window is short.
What’s clear is that the crypto industry has been waiting on this legislation for a long time. The House passed its version well before the Senate got moving, and the lack of a clear regulatory framework has left exchanges, brokers, and custodians operating under persistent uncertainty. Regulators haven’t been waiting around — they’ve kept issuing guidance and moving on parallel tracks regardless of what Congress does or doesn’t do.
September 15 is the date everyone’s watching. If the vote doesn’t happen, or happens and stalls, the CLARITY Act joins a long list of crypto bills that got close and went nowhere. TD Cowen gives that outcome a 75% chance.
Frequently Asked Questions
What does the CLARITY Act actually do?
It tries to split digital asset oversight between two regulators — the CFTC would cover digital commodities, while the SEC would keep jurisdiction over investment contracts.
What is TD Cowen’s assessment of the CLARITY Act passing?
TD Cowen puts the probability of passage this fall at 25%, with a 75% chance the bill stalls before or after the September 15 Senate vote.
