The Clarity Act failed in the Senate, killing the crypto industry's best shot this year at federal market rules for digital assets. Kristin Smith, president of the Solana Policy Institute and interim CEO of the Blockchain Association, said a revival before the November midterms — or in the lame-duck session after them — is unlikely, though she didn't rule it out entirely.
It's a blunt outcome for an industry that has had a decent run on other fronts. Crypto won the Genius Act, a US stablecoin law, and also secured a change to an Internal Revenue Service broker rule. Market structure, the bigger prize, is now stuck.
Two things blocking a comeback
Smith named two hurdles to reviving Clarity: the president's family crypto business and banks that aren't fully on board yet. Neither gets resolved by year-end, she said.
That's the practical problem. The bill needs a coalition that includes traditional finance players who still have questions. Until those questions get answered, the votes probably aren't there.
The slow route through the agencies
With legislation stalled, attention shifts to the regulators. The Commodity Futures Trading Commission opened public comment Monday on rules for leveraged retail crypto trading — a step that could shape how US customers access leveraged products.
But rulemaking at the SEC and CFTC isn't fast. Smith put the timeline at 18 to 24 months. And rules written by one administration can be unwound by the next. Matt Hougan, chief investment officer at Bitwise, concedes that crypto's gains depend on agencies, and a new administration could reverse their rules starting January 2029.
Congress has a tool for that too: the Congressional Review Act lets lawmakers overturn recent agency rules. So even a completed rule isn't permanent.
What durability actually looks like
Smith's argument is that rules finished before summer 2028 would prove durable. The reasoning: once traditional finance and overseas firms build on a finished framework, unwinding it gets harder. Money and infrastructure create their own constituency.
That's a bet on inertia, and it's not a crazy one. The stablecoin law and the IRS change show that once something is in place, undoing it is messy. But it requires getting rules done in the first place — and that's the part still up in the air.
For now, the industry has its wins and a hole where market structure should be. The next concrete marker is the CFTC comment period on leveraged retail trading, which is open now. After that, the calendar runs into the midterms, where Smith sees little room for a Clarity comeback.
