Kevin O’Leary said the CLARITY Act is not dead after its failed procedural vote in the U.S. Senate, calling the setback a delay rather than a final defeat and saying he expects the bill to return to Congress as early as the first or second quarter of next year.
Speaking at Avalanche Summit in New York on Thursday, the Shark Tank investor said the measure fell short in a Senate procedural vote, receiving 49 votes against the 60 needed to advance. In his view, that result does not reflect a collapse in legislative support. He said the push behind the bill is still intact.
Tax legislation is central to his argument
O’Leary said his outlook rests on a simple point: the House Ways and Means Committee has already passed the Digital Asset Tax Certainty Act this week, moving ahead with tax rules for crypto activity even though a broader market structure law is still unresolved.
He said the tax bill covers staking, mining, small transactions, and broker reporting requirements. If Congress starts taxing digital asset activity before it sets out a market structure framework, lawmakers will be pushed back toward CLARITY to close that gap.
「Once you start taxing, you have to have policy,」 O’Leary said.
He framed that as a familiar pattern in how the U.S. federal government handles emerging industries: once a revenue stream is established, a matching regulatory structure usually follows.
He said the Senate result was expected
O’Leary said he was not surprised by Tuesday’s vote. At the summit, he said, 「I thought the probability of passage was zero at the time, and that’s exactly what happened.」
Even so, he described the failed vote as a procedural delay rather than a verdict on the bill’s direction. The CLARITY Act is meant to create a federal framework for the crypto market and clarify how authority is divided between the Securities and Exchange Commission, or SEC, and the Commodity Futures Trading Commission, or CFTC. O’Leary said leaving that question unresolved would keep compliance costs high and legal uncertainty in place across the industry.
He also said crypto regulation will remain on Congress’s to-do list regardless of which party controls the chamber after the November 2026 midterm elections. His reasoning was that crypto has already become a source of tax revenue, and the government is unlikely to leave an industry that generates hundreds of millions of dollars a year operating without clear rules.
Staking tax treatment was a specific focus
O’Leary singled out staking when discussing tax policy. He said, 「We are definitely going to tax staking. That is certain. And the policy has to be in CLARITY. It has to be there.」
That comment reflects a concern inside the industry that tax treatment for staking rewards could move ahead without a matching market structure framework. If that happens, compliance burdens could become uneven and protocol design could also be affected.
According to the source material, the Digital Asset Tax Certainty Act has already cleared the House Ways and Means Committee. It now heads to a full House vote and would then move to the Senate.
The bill includes:
- tax definitions and timing rules for staking rewards;
- standards for recognizing mining income;
- a possible exemption threshold for small crypto transactions, with transactions under $10 potentially exempt;
- reporting and recordkeeping requirements for crypto brokers.
O’Leary said that if those tax rules take effect on their own, without the market structure provisions tied to CLARITY, enforcement could become more confused while SEC and CFTC jurisdiction remains unsettled. That is the logic behind his view that tax legislation could force movement on a broader regulatory bill.
His view lines up with other recent industry comments
His remarks track with other statements cited in the source material. SEC Chair Atkins has said the agency will move ahead with its own regulatory rules whether or not CLARITY passes. Ripple also said after Tuesday’s vote that the bill is not dead.
In the source article’s framing, the shared view across the industry is that the failure of CLARITY is a matter of timing, not direction.
What to watch next
O’Leary’s timeline points to the first and second quarters of next year, matching the start of a new congressional session after the November 2026 midterm elections.
One immediate point to watch is whether the Digital Asset Tax Certainty Act can pass the full House after clearing committee. If it keeps moving, pressure to revive CLARITY could increase.
The Senate remains the main variable. The source article said the gap between 49 votes and the 60-vote threshold stemmed from Democratic concerns over ethics provisions. If that issue is not resolved in the next session, CLARITY could return in revised form rather than as the same bill.
Another point to watch is the SEC’s own rulemaking timeline. If the agency puts its framework in place before CLARITY returns, the Senate version of the bill could end up narrower and function more as ratification than creation.