The CLARITY Act, now advancing in the U.S. Senate, is seen as a pivotal piece of legislation for the crypto industry this policy year. To pass, the bill needs 60 votes, which may require Republicans to reach a compromise with the White House on ethics issues and persuade several wavering GOP senators. Legislative victory, like scoring in sports, depends on multiple factors aligning precisely.
However, the congressional calendar is packed, with only about 40 legislative days remaining — even counting the lame-duck session and midterms, the window for maneuvering is extremely tight. Besides the CLARITY Act, questions remain whether multiple crypto tax proposals split from the new PARITY Act can hitch a ride on broader legislation. Can the core language of the Blockchain Regulatory Certainty Act (BRCA) codify developer protections? And the full-court press around the GENUIS rulemaking continues, with key provisions yet to be finalized.
CFTC's Single-Commissioner Structure Becomes Key Wildcard
The fact that one financial regulator (the CFTC) is missing four of its five commissioners has deeply worried the industry. For crypto, this directly affects expectations of action in Washington — uncertainty looms over whether new commissioners can be nominated and confirmed this year. More critically, who will win the jurisdictional battle over prediction markets? The states? The CFTC and SEC? Or will the Supreme Court ultimately decide?
Crypto Champions Nearing Retirement
Two heavyweight "crypto champions" are about to leave federal government positions: SEC Commissioner Hester M. Peirce and Senator Cynthia Lummis. Peirce, in her second term as commissioner, leads the SEC's Crypto Task Force and has been a key architect of cross-regulatory coordination. Lummis chairs the Senate Banking Committee's Digital Assets Subcommittee, serves as a crucial bipartisan negotiator, and is a strong advocate for the BRCA. Their departures will have far-reaching short- and long-term implications.
Industry Leader Perspectives
Sara K. Weed, partner at Gibson, Dunn & Crutcher LLP, stated: "It is undeniable that we are steadily moving in the right direction. However, due to the scarcity of legislative days and election pressures, the CLARITY Act is unlikely to pass in this Congress. Therefore, agencies like the SEC and CFTC will be forced to play a more active role in providing the industry with much-needed certainty. The question is how far they can go under their existing authorities."
Sulolit "Raj" Mukherjee, CEO of Bodin Advisory, believes that meaningful crypto tax legislation is most likely to pass not as a standalone bill but as part of broader tax, budget, or year-end package legislation. Current proposals are relatively focused and enjoy bipartisan support, aiming to address specific issues such as de minimis exemptions, staking tax treatment, wash sale rules, and information reporting. These provisions are easier to advance when attached to must-pass bills. There is a real chance that at least one or two measures become law this year, but likely through a package rather than a stand-alone crypto tax bill.
Rashan Colbert, U.S. Policy Director at Crypto Council for Innovation, focused on prediction markets. He noted that the CFTC is working to create a more durable regulatory framework, and the recent NPRM is another step toward providing greater transparency and legal certainty. The core question is whether prediction markets should be treated primarily as financial market infrastructure or broadly classified as gambling. He believes these markets have the potential to become sophisticated tools for expressing opinions, hedging risks, and simplifying access to derivatives on various events and assets. An overly broad gambling framework could stifle that potential before markets have a chance to develop into positive-sum financial infrastructure.
The second half of crypto policy has begun. The time window is tight, but the window of opportunity remains open. Ongoing bipartisan communication and pragmatic efforts are needed to achieve tangible results by 2026.