Sen. Cynthia Lummis, R-Wyo., right, reacts to Sen. Mark Warner, D-Va., speaking, not shown, as Sen. Katie Britt, R-Ala., left, looks on, during a Senate Banking, Housing and Urban Affairs Committee hearing, Thursday, Feb. 5, 2026, in Washington, on Capitol Hill. (AP Photo/Mariam Zuhaib)
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There have been a few Cinderella stories during this historic sports season. The crypto industry is hoping for its own comeback with the CLARITY Act in the U.S. Senate. Yet, with two more quarters left, the calculation to 60 votes may well depend on the GOP brokering an agreement on ethics with the White House, as well as courting the Senate Republicans on the fence.
It is only halftime, so all things are still possible with six months left in the year. Scoring a legislative win is not that different from efforts in the athletic arena. Many factors need to line up. And burning some sage can’t hurt, as we saw with the New York Knicks.
The next half of this policy year is crunch time for bipartisan deliberations across both chambers. If we zoom out, it’s clear market structure legislation is just one piece of a larger playbook to advance a comprehensive policy and regulatory framework for Web3 and DeFi.
With just over 40 legislative days left in an already packed Congressional calendar – lame duck sessions and general elections not withstanding – there’s a lot of maneuvering needed to align the scoreboard.
Crowded Policy Field
Beyond the future of CLARITY, is it possible for one of the various new crypto tax bills carved out of the new PARITY Act to find a home in a larger legislative vehicle and become law this year?
And is there a Hail Mary play for Blockchain Regulatory Certainty Act language, which seeks to cement developer protections into law?
Oh yeah, the full court press over rulemaking for GENUIS continues as vital provisions still need to be ironed out.
Like sports fans, crypto enthusiasts have a full deck to keep them engaged and on the edge of their seats.
No Starting Lineup At CFTC
There’s deep concern over a financial agency that is four Commissioners short of a starting line. This is a big deal as the crypto industry’s hopes for Washington action dim due to uncertainty surrounding whether new Commissioners will be nominated and confirmed this year.
Not to mention, who will win the legal skirmish over prediction markets? States or the Commodity Futures Trading Commission and Securities and Exchange Commission? Or could the Supreme Court decide?
No, this is not a prompt to wager!
Hester Peirce, commissioner at the US Securities and Exchange Commission (SEC), speaks during a joint SEC-CFTC roundtable at SEC headquarters in Washington, DC, US, on Monday, Sept. 29, 2025. Photographer: Kent Nishimura/Bloomberg
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Crypto Champions Retire
With so much up in the air, the rest of the year will likely be bittersweet, regardless of what happens policy wise. Two crucial champions are retiring their federal government crypto jerseys. There will certainly be short-term and long term consequences to losing SEC Commissioner Hester M. Peirce and U.S. Senator Cynthia Lummis.
Two term Commissioner Peirce, who leads the agency’s Crypto Task Force, has been a key architect of harmonization efforts across regulatory bodies. Senator Lummis chairs the Senate Banking Subcommittee on Digital Assets and has been a crucial negotiator for bipartisan compromise and an advocate for BRCA.
The Ohio Clock is seen outside of the US Senate chamber. (Photo by Alex WROBLEWSKI / AFP) (Photo by ALEX WROBLEWSKI/AFP via Getty Images)
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Outlook For Next Six Months
I asked a few senior industry leaders for their thoughts about the state of crypto policy deliberations. Here’s what they had to say about CLARITY, tax, and prediction markets.
Sara K. Weed, Partner, Gibson, Dunn & Crutcher LLP:
“It is undeniable that we are making directional progress, but with limited legislative days and election pressures, it seems unlikely that CLARITY passes this session. As a result, agencies like the SEC and CFTC will be called on to play even more active role in creating much-needed certainty for the industry. The question remains, of course, just how far they can take it with their existing authority.”
Sulolit “Raj” Mukherjee, CEO of Bodin Advisory:
“If history is any guide, the most likely path for meaningful crypto tax legislation is not as a standalone bill, but as part of a broader tax, budget, or year-end legislative package. Many of the current proposals are relatively targeted, bipartisan, and designed to resolve discrete issues, such as de minimis exemptions, staking taxation, wash sale treatment, and information reporting. Those provisions are often easier to advance when attached to larger must-pass legislation than when they move independently. That said, enactment will ultimately depend on congressional bandwidth, scoring, and whether lawmakers view crypto tax rules as technical fixes that improve compliance rather than as broader digital asset policy debates. There is a credible opportunity for one or more of these measures to become law this year, but likely through legislative packaging rather than a standalone crypto tax bill.”
Rashan Colbert, U.S. Policy Director, Crypto Council for Innovation:
“I won’t predict how the courts will resolve the jurisdictional fight, but the broader direction is clear: the CFTC is working to define a more durable regulatory framework for prediction markets as the category matures. The recent NPRM is another step toward giving market participants more transparency and legal clarity in a space seeing rapid growth in both users and trading volume.
“The key question is whether prediction markets are treated primarily as financial market infrastructure or broadly classified as gaming. I believe these markets have the potential to become sophisticated tools for expressing views, hedging risk, and simplifying access to derivatives across a wide range of events and asset classes. An overly broad gaming framework could undermine that opportunity before the market has a chance to develop into the positive-sum financial infrastructure it can become.”