CLARITY Act Enters 'Walking Dead' State as SEC Prepares Crypto Rules
The Senate will hold a procedural vote on the CLARITY Act on Sept. 15 after missing its August window, while the SEC advances a parallel crypto rulemaking agenda. Bitwise warns the bill is in a ‘walking dead’ state.
U.S. Senator Jim Risch (R-ID) announced on Aug. 8 that the Senate will begin the process of passing the CLARITY Act on Sept. 15. Senate Majority Leader John Thune (R-SD) filed cloture, scheduling the vote for 2:15 p.m. EDT. The question before senators is whether to take up the bill, not whether to pass it. Clearing the procedural hurdle requires 60 votes, meaning at least seven Democrats must join the 53-seat Republican majority. Talks remain open on issues like ethics requirements, illicit-finance provisions, and reconciling Senate Agriculture Committee language.
Bitwise Chief Investment Officer Matt Hougan described the scenario as the legislation entering a ‘walking dead’ state, where it survives politically but fails to reach a final resolution. This limbo increases the importance of SEC actions. SEC Chair Paul Atkins has indicated that regulators can address many of the same issues as the CLARITY Act if Congress does not complete the legislation.
Atkins outlined an interim approach in February, stating that the SEC and CFTC intend to provide a regulatory bridge while Congress works on market structure legislation. Their joint Project Crypto initiative includes work on token classifications and potential exemptions for onchain transactions. The SEC’s July regulatory agenda focuses on crypto fundraising, custody, and tokenized securities, aiming to clarify how crypto assets can be issued, held, and traded under federal securities laws.
However, agency action has limits. The CLARITY Act would establish broader responsibilities between the SEC and CFTC, including oversight of digital commodities, registration, and market infrastructure. These jurisdictional boundaries require congressional action. Senator Cynthia Lummis (R-WY) is pressing for comprehensive federal market structure legislation to establish clearer rules for businesses and investors.
The next congressional test arrives Sept. 15, when senators decide whether to take up H.R. 3633, which cleared the House 294-134 and advanced from the Senate Banking Committee 15-9.