Key Takeaways
TD Cowen puts the CLARITY Act’s odds of enactment at just 25%.Ethics and anti-money laundering disputes could derail Senate action.Three failure scenarios could stop the bill without final passage.
Why TD Cowen Sees the Bill Failing This Fall
The crypto industry’s market-structure push is now a long shot, according to an Aug. 10 policy note from TD Cowen Washington Research Group analyst Jaret Seiberg provided to Bitcoin.com News. The firm puts the probability of the CLARITY Act becoming law at 25%, days after Senate Majority Leader John Thune (R-SD) filed cloture on the motion to proceed Aug. 8. The bill cleared the Senate Banking Committee in a 15-9 bipartisan vote on May 14.
Seiberg wrote:
“We assign a 75% probability that CLARITY fails to become law this fall.”
The central policy debate centers on how the CLARITY Act would divide federal oversight of digital assets between the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Digital commodities would fall under the CFTC, while investment contract assets would remain under SEC oversight.
He added:
“The bill is not dead, but the path forward is harder.”
In the first of three failure scenarios, the Senate clears the initial cloture vote in September, but the legislative process later collapses. Democrats press for changes to the ethics and Bank Secrecy Act provisions, Republicans refuse to allow votes on those amendments, and Democrats then block the cloture motion to end debate. Seiberg expects that sequence would effectively kill the bill.
Ethics and Anti-Money Laundering Disputes Could Decide the Next Vote
Senators have remained divided for months over ethics, illicit finance, and anti-money laundering requirements under the Bank Secrecy Act, issues that could determine the amendment fight described by Seiberg. Updated CLARITY Act text released by U.S. Senator Cynthia Lummis (R-WY) on July 22 reflects the merged work products of the Senate Banking and Agriculture committees, according to Lummis’ office.
The legislative impasse has persisted well beyond the House vote. The CLARITY Act has sat unfinished more than a year after House passage, leaving the Senate’s approach to registration and disclosure rules for exchanges, brokers and custodians unsettled.
Senate Could Never Hold the Initial Cloture Vote
A second TD Cowen scenario has the scheduled Senate vote never taking place at all. Republicans may prefer avoiding a floor fight over President Donald Trump’s crypto holdings and objections from major law enforcement groups, Seiberg wrote.
The note stated:
“Just because Majority Leader John Thune filed cloture on Clarity does not mean there has to be a vote.”
Senators agreed before departing Washington that the chamber would hold the vote at 2:15 p.m. ET on Sept. 15, reducing the likelihood of that scenario without eliminating it.
Prediction markets have similarly lowered expectations for enactment. Traders put the CLARITY Act at a 21% chance of becoming law in 2026 as of Aug. 9, roughly in line with TD Cowen’s estimate.
Initial Cloture Could Pass With No Follow-Up Votes
The third failure scenario involves an initial procedural victory followed by legislative paralysis. Thune gives the crypto sector its initial cloture vote and nothing follows: limited debate, no amendment votes and no additional cloture motions. The bill would avoid a decisive second defeat while effectively ceasing to advance, an outcome Bitwise Chief Investment Officer Matt Hougan has described as a “walking dead” state while regulators advance parallel crypto rules.
Stablecoin yield remains another unresolved policy dispute capable of complicating negotiations. Stablecoins are cryptocurrencies designed to hold relatively stable values through fiat backing or other mechanisms, and whether digital asset service providers can pay holders a return has split senators and the banking lobby. Major stablecoins vary in structure, use and risk, even as they share the goal of maintaining a relatively stable value.
What Would Have to Happen for the Bill to Pass
TD Cowen’s 25% enactment case includes three potential routes, with the most likely requiring Democrats to secure an ethics amendment vote and lose it. The analyst wrote: “We assign a 25% probability that CLARITY become law.”
Under that scenario, the initial cloture motion clears 60 votes, Democrats offer their bipartisan ethics compromise as an amendment, Republicans defeat it on a simple majority, and crypto-friendly Democrats back the bill after recording their support for the failed amendment. A less likely route has President Trump reaching his own ethics deal with Democrats, freeing enough votes to end debate.
Seiberg concluded:
“We believe the bill could pass in the lame duck if Republicans keep the House and the Senate. We view that scenario as unlikely though not impossible.”
That scenario would push enactment beyond the fall and depend on Republicans retaining control of both chambers. Lawmakers return Sept. 14, and Republicans, holding 53 seats, need at least seven Democrats or independents to support cloture on Sept. 15, assuming every Republican votes in favor.
