The bill is currently effectively shelved, with limited pathways for a "lame-duck session" breakthrough; the text may be reintroduced as early as January 2027.

Written by: Zennon Kapron, Forbes

Translated by: Saoirse, Foresight News

Before the election, the CLARITY Act was already struggling. Now that the Democrats swept both houses in the midterm elections, hopes to revive this cryptocurrency market bill before the new Congress takes office seem very slim.

On September 15, the Senate voted on a motion to end debate regarding House Bill No. 3633 — the CLARITY Act (Digital Asset Market Clarity Act), resulting in 49 votes in favor and 50 votes against, falling short of the 60 votes required by 11. The bill has not been able to reach a final substantive vote. However, Senator Thom Tillis submitted a motion for reconsideration on the day of the vote, allowing the bill to be preserved procedurally, but there has been no substantial progress since.

The Democrats will control the new Congress, which opens on January 3, 2027, making it unlikely that they will cooperate with the Republicans to push the current version of the bill during the "lame-duck session." The bill theoretically has only two remaining pathways before the end of the 119th Congress: either negotiate amendments to the text among members and resubmit it for Senate voting; or attach cryptocurrency market regulation provisions to a must-pass bill in December. However, the likelihood of either pathway succeeding is low.

(Note: The "lame-duck session" refers to the legislative period after the conclusion of U.S. Congressional elections and before the new members of Congress take office on January 3; if Congress chooses to adjourn after the elections, the lame-duck session does not occur.)

The CLARITY Act is 11 Votes Short of Passing

The reality behind this recorded vote is far more severe than the headlines stating "only one vote lost." All 49 votes in favor came from Republican lawmakers; the 50 votes against included all voting Democratic members present, two independent members, and four Republican senators: Susan Collins (Maine), Josh Hawley (Missouri), Jerry Moran (Kansas), and Thom Tillis (North Carolina). Delaware Democratic Senator Christopher Coons was absent from the vote. Even if Coons had voted in favor and all four of the aforementioned Republican dissenters had flipped to support, the total would only have reached 54 votes, still 6 votes short of the threshold. To initiate a motion to end debate, the bill must gain support from the Democratic camp who previously voted against it.

The House already passed the bill on July 17, 2025, with 294 votes in favor and 134 against. At that time, the Senate Banking Committee, chaired by Tim Scott, also introduced an alternative version on June 1. The Congressional Research Service’s summary of the bill outlines the core compromise of this proposal: the U.S. Commodity Futures Trading Commission (CFTC) as the primary regulatory authority overseeing "digital commodities" and their respective trading platforms, while the SEC (Securities and Exchange Commission) retains the authority to delineate clear regulatory responsibilities. The division of jurisdiction between these two major agencies, along with an ethical clause added later by the Senate, is precisely where the core disagreements of the debate lie.

Tim Scott stated in a committee statement on September 15 that the vast majority of Republican senators voted in favor of moving the bill forward, "The motion ultimately failed primarily due to the Senate Democrats." He believes that before Congress completes any legislation, the SEC and CFTC should first produce clear regulatory rules for the field of digital assets. Democratic senior senator Elizabeth Warren urged a no vote on the same day. She acknowledged the feasibility of a bipartisan effort to create a cryptocurrency regulatory bill but frankly stated, "It should not be the current version," as this bill poses significant risks to ordinary families, the U.S. economy, and national security.

Regulatory Rules Regarding Stablecoins are Still Progressing

The voting defeat in September does not mean that the crypto industry is entirely excluded from federal written regulatory legislation. Payment stablecoins already have the GENIUS Act as a foundation, and the Office of the Comptroller of the Currency (OCC) has begun drafting regulatory guidelines for stablecoin issuing institutions, as previously reported by GL Insight. However, the CLARITY Act focuses on a different set of market structure issues: the legal classification of various tokens, exchange regulation, and the delineation of responsibilities between the SEC and CFTC, which are the unresolved aspects that led to the failure to end debate.

Midterm Elections Reduce the Chances of an Agreement in December

The Democrats will take over both the House and Senate in January next year. CNBC estimated on November 9 that the Democrats will have at least 255 seats out of 435 in the House and could reach up to 56 seats in the Senate. This is only an estimated range and not the final vote count result. As of the afternoon of November 10, 270toWin reported that seven Senate seats have changed parties, including Texas, Ohio, Kansas, and Maine; two districts have not completed counting: in Alaska, Democratic candidate Mary Peltola faces off against Republican Senator Dan Sullivan, and ranked-choice counting will start on November 18; in Mississippi, Democratic candidate Scott Colom is currently leading Republican Senator Cindy Hyde-Smith. There are still 19 House districts with pending results, and some seats in Louisiana will have to wait for a runoff in December. However, slight changes in the vote count will not affect the party control of the chambers.

But the election results have indeed changed the negotiation motivations of all parties in the next six weeks. Even if the September vote failed, the Senate Republican majority, which still controls the Banking Committee during the lame-duck session, originally had a chance to push for the bill again. However, the soon-to-be-in-power Democrats can simply wait until January to draft an entirely new bill on their own. CNBC's post-election analysis pointed out that before the new Congress members are sworn in, the Democrats "have virtually no incentive to compromise."

CNBC reported that the Republican who voted against the bill, Susan Collins, has lost to Democratic candidate Troy Jackson in this election. This is negative news for any renewed attempt to initiate a vote to end debate in December, as the new Senate will only have more Democratic seats.

Congress Has Very Limited Legislative Time Left

The Senate's tentative schedule for 2026 is as follows: adjournment from November 11-13 for Veterans Day; adjournment from November 23-27 for Thanksgiving; adjournment from December 21-31. Federal government funding authorization is set to expire on December 11; whether it is a short-term continuing resolution or a complete annual appropriations bill, it will require 60 Senate votes to pass.

CNBC mentioned that the House passed the National Defense Authorization Act in July, but the Senate Democrats simultaneously rejected the Senate version. Senate Minority Leader Chuck Schumer stated that if the president "continues to drag the U.S. deeper into conflict with Iran," the Democrats will not allow the bill to pass. The report also mentioned that Defense Secretary Pete Hegseth will face impeachment votes.

A market structure bill that has already failed in the ending debate phase is far less of a priority than government funding and annual defense authorization. Theoretically, it could be included as an amendment in such must-pass bills, but currently, no member has publicly proposed this plan; furthermore, the Democratic caucus on which the bill relies has just secured the initiative to draft regulatory plans on its own beginning in January.

Only Two Possible Paths Remain for the "Lame-Duck Session"

The first path is to utilize Thom Tillis' motion for reconsideration. Based on this motion, the Senate can vote again directly on the September 15 ending debate motion without restarting the process. However, the vote gap still exists, needing an additional 11 votes in favor, with most of the new votes needing to come from the Democrats who previously voted against it, or a version that Democrats can accept must be produced. Elizabeth Warren has expressed her willingness for Republicans to come to the negotiating table to collaboratively outline a truly bipartisan crypto bill. If the new bill were to expand the SEC's powers and refine the ethical provisions she believes have loopholes, it might garner some support from the opposing votes, but this would alter the formally approved text by the House.

The second path is to include the negotiated final bill content in the December appropriations bill or the final version of the National Defense Authorization Act. Hard bills of this nature are frequently bundled with various additional issues as the risk of government shutdown nears. However, the Democrats only need to wait another six weeks to set their regulatory rules independently. The Republicans' desire to push for the end of debate still relies on Democratic votes, and moreover, the Republicans have already confirmed they will lose control of the new Senate.

Both paths are feasible at the procedural level of Senate rules but are fraught with uncertainties in reality. If both paths are blocked, the outcome is clear: according to the 20th Amendment to the U.S. Constitution, at noon on January 3, 2027, the 119th Congress will formally close, and all pending bills will become invalid. House Bill No. 3633, the Senate committee alternative, and the Tillis motion for reconsideration will all be void. Lawmakers must resubmit the bill to the 120th Congress for committee review, crafting a new regulatory text for the cryptocurrency market.

The Democrats May Draft A Crypto Bill With Diverging Ideas

Reports following the election have begun to outline the general direction of the new bill. On November 4, journalist Eleanor Terrett revealed internal discussions among House Democrats: they plan to expand Representative Maxine Waters' amendment proposed during the 2025 CLARITY Act review — the Cryptocurrency Investor and Consumer Rights Act — into a broader market structure bill for the new Congress; the new bill will expand the SEC's authority while correspondingly narrowing the CFTC's regulatory space. This information is based on internal discussions disclosed by the media and is not the formal text of the bill, but it is highly consistent with Elizabeth Warren's stance from September and aligns with the Democrats' upcoming control of the relevant committees.

Elizabeth Warren currently serves as the Democratic senior member of the Senate Banking Committee; should the Democrats take control of the Senate, she is expected to become the committee chair, although the personnel arrangements have yet to be finalized. The chair of the House Financial Services Committee will also be held by a Democrat. The new bill will be led by amendments from these two committees, no longer spearheaded by Tim Scott. Unless Congress makes further adjustments, the GENIUS Act remains the effective law in the stablecoin sector. The core of the forthcoming battles will still center around token classification, exchange regulation, and which federal agency holds the primary oversight authority.

Three Key Areas to Watch Before January 3

1. Whether a new round of debate-ending votes is scheduled, the revised bill text is publicly released, or there is an attempt to attach cryptocurrency market regulation provisions to the appropriations bill or the National Defense Authorization Act, which expires on December 11;
2. The vote count results for Alaska, Mississippi, and the other House districts that have not completed counting will only change the margin of the Democratic seat advantage and will not shake the control of the parties;
3. The selection of new leadership for the Senate Banking Committee and the House Financial Services Committee, as the rewriting of the bill will be led by these two officials.

Unless one of the first situations occurs, the CLARITY Act as a legislative project for 2026 is basically drawing to a close. The bill was defeated by a vote of 49:50 in September, while the midterm elections handed the new Congress to the party that overwhelmingly voted against it. This current "lame-duck session" is constrained by funding deadline and defense bill agendas, leaving a short legislative window available; although there are theoretically still options for reconsideration or bundling legislation, as of November 12, no related movements have been observed.