TD Cowen puts the odds of the CLARITY Act failing to become law this fall at 75%, cutting its enactment probability to 25%. Three of its scenarios would end the crypto market structure bill without a final passage vote, with the Senate’s next test set for Sept. 15.
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.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 Senate Could Never Hold the Initial Cloture VoteA 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.
Initial Cloture Could Pass With No Follow-Up Votes What Would Have to Happen for the Bill to PassTD 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.
