Regulators maintain authority as landmark crypto bill stalls in Senate

The crypto industry’s best shot at a comprehensive federal regulatory framework is stuck in legislative purgatory, and the agencies that were supposed to get clearer marching orders are now free to keep doing things their own way.

The CLARITY Act, which would draw clean jurisdictional lines between the SEC and CFTC over digital assets, has gone from near-certainty to long shot. Polymarket odds of the bill passing in 2026 have collapsed from roughly 82% to just 16%, a decline that tracks neatly with the Senate’s decision to punt a crucial cloture vote to September 15.

A bill that can’t get out of its own way

The House passed the CLARITY Act in July 2025 with a bipartisan vote of 294-134. The Senate Banking Committee advanced its own version in May 2026 by a tighter 15-9 vote, and that’s where things started to unravel. The bill got tangled in disputes over ethics provisions tied to public officials’ conflicts of interest. Additional friction points around DeFi governance and stablecoin reward mechanisms haven’t helped.

The Senate’s decision to postpone the cloture vote until mid-September effectively burns the remaining legislative calendar.

The SEC adds its own wrinkle

The SEC canceled a significant meeting that had been scheduled for August 14, 2026, where commissioners were expected to discuss new crypto-specific regulations. The agency attributed the cancellation to an unforeseen scheduling issue.

This leaves both the SEC and CFTC operating under their existing authorities, which is precisely the patchwork approach the CLARITY Act was designed to replace. The SEC continues to lean on the Howey test for determining which tokens qualify as securities, while the CFTC treats certain digital assets as commodities.

What this means for the market

The drop in passage odds from 82% to 16% reflects a real shift in how informed observers assess the political landscape. The conflict-of-interest provisions that derailed the Senate negotiations address situations where public officials with crypto holdings participate in regulatory decisions affecting those holdings.

The September 15 cloture vote is now the next milestone worth watching. Even if the Senate manages to advance the bill past cloture, the ethics provisions and DeFi-related disagreements would still need resolution before a final vote. Conference committee reconciliation with the House version would follow.

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