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Andrew Cuomo isn’t mincing words. The former New York Governor says U.S. crypto regulation is basically built on sand — and the midterms could wash it away fast.
Why It Matters
The potential failure of the CLARITY Act highlights the precariousness of the current regulatory framework governing cryptocurrencies in the U.S. With approaching midterm elections that could significantly alter Congressional dynamics, the lack of bipartisan support for comprehensive legislation raises the risk of regulatory instability. This uncertainty could lead to increased volatility in crypto markets, as industry stakeholders grapple with the implications of shifting regulatory landscapes that could undermine confidence and investment in digital assets.
Cuomo’s argument is pretty straightforward: without bipartisan legislation locked in by Congress, whatever rules the SEC and CFTC have cobbled together for digital assets are politically exposed. Agency-level rules aren’t laws. They can be unwound. And with midterm elections shifting the balance of power, that’s not a hypothetical risk — it’s a near-term one.
The CLARITY Act was supposed to fix that.
The CLARITY Act’s Senate Problem
The House passed the CLARITY Act in 2025. It was meant to build a real national framework for digital assets — something that would give businesses, investors, and consumers a stable set of rules to operate under. But it died in the Senate. No floor vote, no deal, no law. So the regulatory vacuum stayed open, and federal agencies stepped in to fill it on their own terms.
The SEC and CFTC rolled out new rules to manage crypto markets in the absence of congressional action. Those rules do provide some structure. But structure isn’t the same as durability. Rules written by agencies under one administration can be rewritten — or killed entirely — by the next. That’s the core problem Cuomo keeps coming back to.
He’s seen it happen before. Cuomo served in the Clinton administration, and he’s watched how quickly congressional control can strangle executive agency work. Subpoenas. Funding cuts. Public hearings that drag on for months. Legislative overrides. Congress has a lot of tools when it wants to make life hard for regulators, and it tends to use them when the political winds change.
What a Democratic Congress Could Mean for Crypto Rules
Cuomo says Democrats are projected to take at least one chamber of Congress after the midterms. If that happens, oversight of crypto agencies could get sharp and fast. He’s not framing that as a good or bad thing necessarily — it’s just the reality of how congressional power works. Agencies that pushed through new rules without legislative backing become targets. Their authority gets questioned. Their budgets get squeezed. Their rules get challenged in hearings that generate bad press and legal uncertainty.
For crypto markets, that’s a rough environment to operate in. Companies don’t like uncertainty. Investors don’t like it either. And right now, the U.S. regulatory picture is basically one election cycle away from looking completely different.
That’s not a stable foundation for an industry that needs long-term planning to grow.
The Global Comparison That Should Worry Washington
Cuomo points to Europe’s Markets in Crypto Assets regulation — MiCA — as the kind of thing the U.S. should be matching. MiCA isn’t perfect, but it’s comprehensive and it’s law. Companies operating across Europe know what the rules are and can plan around them. Singapore has done something similar. Clear frameworks, predictable enforcement, real legal certainty.
The U.S. doesn’t have that right now. And the longer Congress sits on its hands, the more ground it cedes to jurisdictions that have already figured this out. Businesses that might have built in New York or Texas start looking at Dublin or Singapore instead. That’s not a theoretical outcome — it’s probably already happening in some corners of the industry.
Cuomo’s push is for the next Congress to treat bipartisan crypto legislation as a priority, not a backburner issue. Innovation and consumer protection aren’t mutually exclusive, he says. But you can’t have either one without a stable legal foundation underneath them.
The urgency is real. Agency rules without congressional backing are fragile. Political shifts can flip them. And the gap between what the U.S. has right now and what countries like Singapore and the EU member states have built is widening, not narrowing.
It’s worth noting that Cuomo didn’t spell out exactly which provisions he wants in a bipartisan bill, or which specific senators he thinks could broker a deal. No details on that front. What he’s clear on is the stakes: without legislative action, the U.S. risks being an afterthought in global digital asset markets.
The CLARITY Act cleared the House. It stalled in the Senate. And the clock on the midterms is running.
Frequently Asked Questions
What is the CLARITY Act and where does it stand?
The CLARITY Act is a proposed U.S. legislative framework for digital assets that passed the House in 2025 but failed to advance in the Senate, leaving crypto regulation to agency-level rules from the SEC and CFTC.
Why does Cuomo say current crypto rules are politically vulnerable?
Because agency rules — unlike laws passed by Congress — can be reversed or disrupted through congressional tools like funding restrictions, subpoenas, and legislative overrides, especially if the political balance shifts after midterm elections.
