U.S. Crypto Policy in the Second Half: CLARITY Bill Seeks 60 Votes, CFTC's "One-Person Commission" Becomes the Biggest Variable
- Core Viewpoint: The U.S. Congress is advancing multiple crypto legislations, including the CLARITY Act, but due to a shortage of legislative working days and electoral pressures, passage within the year is unlikely; the industry must rely on proactive regulation by agencies like the SEC and CFTC, while paying attention to progress on sub-issues such as taxation and prediction markets.
- Key Elements:
- The CLARITY Act requires 60 votes to pass; Republicans may need to compromise with the White House and secure support from some Republican senators, but the probability of passage within the year is low.
- Congress has only about 40 legislative working days remaining (including the lame-duck session), leaving little time; crypto tax proposals may be bundled into broader legislation.
- The CFTC currently lacks four commissioners, affecting regulatory efficiency; the jurisdictional battle over prediction markets (states vs. CFTC/SEC vs. Supreme Court) remains unresolved.
- Two crypto policy champions are about to depart: SEC Commissioner Hester Peirce and Senator Cynthia Lummis, weakening industry leadership.
- Industry leaders predict: at least 1-2 crypto tax measures (e.g., exemption thresholds, staking treatment) could be enacted through omnibus legislation within the year; prediction markets will require clear regulatory classification.
Original Author: Cleve Mesidor (Executive Director, Washington DC Blockchain Foundation)
Original Translation: AididiaoJP, Foresight News
In this sports season filled with Cinderella stories, the crypto industry is also awaiting its own moment in the spotlight – the CLARITY Act, currently advancing in the U.S. Senate, could potentially be that critical "comeback." However, with two quarters left until the final buzzer, securing 60 votes for passage may require Republicans to reach a compromise with the White House on ethical issues, while also winning over several undecided GOP senators.
It's only halftime; there are still six months left in the year, and anything is possible. Legislative victories aren't fundamentally different from scoring points on the field – they require the precise alignment of multiple factors. Sometimes, burning some sage for good luck doesn't hurt – just like the New York Knicks have shown this year.
The second half of the policy year will be a critical period of intensive negotiations between the two parties in both the Senate and the House. Zooming out, market structure legislation is just one piece of a larger playbook, aimed at building a comprehensive policy and regulatory framework for Web3 and DeFi.
The congressional calendar is already packed, with only about 40 legislative working days remaining – even factoring in the lame-duck session and the midterm elections, time is tight for all sides to maneuver and adjust the score.
A Crowded Policy Arena
Beyond the prospects of the CLARITY Act, can the various crypto tax proposals carved out from the new PARITY Act hitch a ride on broader legislative vehicles and be enacted this year?
Can the core language of the Blockchain Regulatory Certainty Act execute a "Hail Mary" pass and officially enshrine developer protections into law?
Furthermore, the full-court press surrounding the GENIUS rulemaking process continues, with key provisions still awaiting finalization.
For crypto enthusiasts, this feels like following a sports team all season: a rich lineup, constant suspense, both exciting and nerve-wracking.
CFTC Lacks a Starting Lineup
The fact that a financial regulatory agency has four commissioner seats vacant deeply concerns the industry. For the crypto sector, this directly impacts expectations for action in Washington – uncertainty remains over whether new commissioners can be nominated and confirmed this year.
More thorny is the question of who will win the jurisdictional battle over prediction markets: individual states, or the Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC)? Or will it ultimately be decided by the Supreme Court?
Of course, this is not a suggestion to go make a bet.
Crypto Champions Set to Retire
Regardless of the final policy outcome, the rest of this year is likely to be bittersweet. Two heavyweight "crypto champions" are about to hang up their federal government jerseys, and their departures will have significant short- and long-term impacts: SEC Commissioner Hester M. Peirce and U.S. Senator Cynthia Lummis.
Peirce, as a two-term commissioner leading the SEC's Crypto Task Force, has been a core architect of cross-regulatory coordination efforts. Lummis, as chair of the Senate Banking Committee's Digital Assets Subcommittee, has been a key negotiator for bipartisan compromise and a staunch advocate for the BRCA.
Outlook for the Second Half: Industry Leaders Weigh In
I interviewed several seasoned industry leaders to gauge their judgment on current crypto policy deliberations. Here are their perspectives on CLARITY, taxes, and prediction markets:
Sara K. Weed (Partner, Gibson, Dunn & Crutcher LLP):
"It's undeniable that we are steadily moving in the right direction. However, constrained by the shortage of legislative working days and election pressures, the likelihood of CLARITY passing in this Congress is low. Therefore, agencies like the SEC and CFTC will be forced to play a more active role in providing much-needed clarity for the industry. Of course, the question is how far they can actually go under their existing authority."
Sulolit "Raj" Mukherjee (CEO, Bodin Advisory):
"If history is any guide, meaningful crypto tax legislation will most likely not pass as a standalone bill but will be embedded in broader tax, budget, or year-end omnibus legislation. The current proposals are relatively targeted, have some bipartisan consensus, and aim to solve specific issues like *de minimis* exemptions, staking tax treatment, wash sale rules, and information reporting requirements. These provisions are easier to advance when attached to must-pass legislation. Whether they ultimately make it depends on Congress's bandwidth, the budget scoring, and whether lawmakers view crypto tax rules as a technical fix to improve compliance, rather than part of the broader digital asset policy debate. The chance of at least one or two measures becoming law this year is real, but likely through a packaging strategy rather than a standalone crypto tax bill."
Rashan Colbert (Director of U.S. Policy, Crypto Council for Innovation):
"I won't predict how the courts will resolve jurisdictional disputes, but the overall direction is clear: as the prediction market category matures, the CFTC is working towards creating a more durable regulatory framework for it. The recently released NPRM is another step towards providing greater transparency and legal certainty for market participants – the user base and trading volume in this space are growing rapidly.
The core question is: Should prediction markets be primarily viewed as financial market infrastructure, or broadly classified as gambling? I believe these markets have the potential to become sophisticated tools for expressing opinions, hedging risk, and simplifying access to derivatives on various events and assets. Adopting too broad a gambling framework could stifle this potential before the market has a chance to develop into a positive-sum financial infrastructure."
The second half of the crypto policy game is underway. The window of time is narrow, but the window of opportunity remains open. The industry needs sustained bipartisan communication and pragmatic efforts to achieve substantial outcomes by 2026.
