Why Galaxy Sees a One-in-Ten Chance for the Crypto Bill
Odds that the CLARITY Act passes this year have fallen to 10%, according to Galaxy Digital (Nasdaq: GLXY). Alex Thorn, head of firmwide research at the digital-asset firm, stated the revised figure in an Aug. 14 post on X, down from 75% in May. The bill would divide U.S. crypto oversight between two federal regulators.
Senators return to Washington on Sept. 14 and face a working period of roughly three weeks before leaving for midterm election activity around Oct. 2. Thorn stated:
“The reality is that CLARITY is now much more about politics than policy.”
The cloture motion on proceeding to the bill will ripen at 2:15 p.m. EDT on Sept. 15, according to the Senate schedule. If held, the procedural vote would place the CLARITY Act among the first major legislative items awaiting lawmakers after the recess. Oversight of digital commodities and certain crypto transactions would be divided between the U.S. Securities and Exchange Commission (SEC) and the U.S. Commodity Futures Trading Commission (CFTC).
Senate Majority Leader John Thune (R-SD) filed a motion to proceed to H.R. 3633, the Digital Asset Market Clarity Act of 2025, in the final hours before recess, then sought cloture on that motion. Approval would require at least 60 senators. Republicans control 53 seats, meaning supporters need seven more votes if every GOP senator backs the measure.
How Galaxy’s CLARITY Act Odds Fell From 75% to 10%
Galaxy raised its estimate to 75% on May 22, up from 55% before the Senate Banking Committee’s markup. The firm reduced the figure to 60% in June as competing Senate priorities reduced the available floor time, even though the bill had cleared committee with bipartisan support.
By late July, Galaxy had cut the CLARITY Act’s probability of becoming law to 30%, down from an intervening 50% estimate. The July 24 revision followed the release of a 616-page combined Senate proposal as unresolved ethics, illicit-finance, stablecoin, and custody provisions complicated efforts to secure the 60 votes needed for cloture.
The firm reduced its estimate again to 10% on Aug. 14 as the Senate entered its recess without resolving the central disputes. The firm cited the unsettled ethics agreement, diminished Republican support following bank lobbying, and a September legislative session lasting only two to three weeks as obstacles to passage this year.
What Blocked the Bill Before the August Recess
Three unresolved fights made it difficult for supporters to assemble 60 votes before the August break, and the majority leader declined to call a floor vote rather than risk defeat. Ethics controls, bank lobbying, and developer protections each resisted settlement despite bipartisan negotiations.
The Senate Committee on Banking, Housing, and Urban Affairs advanced the measure 15-9 on May 14, with two Democrats joining every Republican. Conflict-of-interest limits on senior officials’ crypto holdings hardened into the central obstacle, and a bipartisan group of senators sent a proposed agreement to the White House on July 30 without receiving a public response, according to Galaxy.
Community banks pressed senators over provisions involving stablecoin yield, eroding Republican support that once appeared secure. Illicit-finance hawks pushed separately to narrow the Blockchain Regulatory Certainty Act, which shields non-custodial software developers from money transmitter rules. The CLARITY Act entered the recess with both disputes open.
How the CFTC Asserted Its Existing Prediction-Market Authority
While the CLARITY Act would establish a broader framework for digital commodities, the CFTC has separately asserted its existing federal authority over prediction markets. The agency ordered KalshiEX LLC on Aug. 11 to keep operating under the Commodity Exchange Act’s core principles, after the exchange notified it of a market emergency. New York Attorney General Letitia James sued Kalshi on July 31, seeking a nationwide bar on all event contracts as well as forfeiture of allegedly illegal gains, restitution, and fines equal to three times those gains.
The Kalshi dispute centers on whether federally regulated event-contract markets remain subject to state gambling laws. The commission has filed lawsuits against Arizona, Connecticut, Illinois, Kentucky, Minnesota, New Mexico, New York, Rhode Island, and Wisconsin, asserting federal jurisdiction while the broader crypto bill remains stalled.
CFTC Chairman Michael S. Selig remarked: “New York intends to make event contract derivatives waste away under its iron curtain of state gaming laws before the courts get the chance to issue final rulings.”
Why the SEC’s Crypto Proposal Also Stalled
The SEC’s crypto rulemaking covers ground the CLARITY Act also occupies, according to Thorn, who said the proposed offering regime is substantially related to the bill’s Title I. The agency scheduled an Aug. 14 open meeting to weigh a tailored offering regime for certain investment contracts involving crypto assets.
Secretary Vanessa Countryman logged the cancellation in a notice dated Aug. 13, one day before commissioners were due to meet. Commissioners would have considered whether to release the proposal for public comment, rather than voting on a final rule. The notice supplies no reason and names no replacement date, leaving both the legislation and the SEC proposal unresolved.
