The Clarity Act stalled. Bankers aren’t hitting the brakes yet on crypto dealmaking

The crypto industry had waited years for Congress to deliver what it has long wanted: a lasting U.S. rulebook for digital assets that would clarify which digital assets fall under the oversight of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).

That would’ve provided greater certainty for businesses and investors in the crypto industry than relying largely on regulators whose policies can change between administrations.

Then those hopes suffered a setback on Sept. 15.

The Clarity Act bill failed a procedural vote in the Senate, drawing 49 votes in favor and 50 against, short of the 60 needed to advance. Negotiations had foundered over ethics restrictions on senior officials’ crypto business interests, including President Donald Trump’s, alongside concerns about investor protection and illicit finance.

With the November midterms approaching and little legislative time remaining, the defeat sharply reduced the chances of passage this year, leaving regulators to fill the gap.

And that raises a question for another booming corner of crypto: dealmaking.

Fewer deals?

On the face of it, one might think that the Clarity Act’s failure to advance would likely dampen crypto dealmaking.

After all, regulatory uncertainty would make it harder for potential buyers, especially traditional financial firms, less willing to pursue acquisitions in the U.S., particularly when the target’s business depends on tokens or activities whose regulatory treatment could change.

But bankers and investors who spoke to CoinDesk don’t expect the Clarity Act’s setback to slam the brakes on crypto M&A. Instead, they see a more uneven effect: deals in areas where regulators have already provided clearer rules may keep moving, while businesses exposed to unresolved regulatory questions could remain harder to buy.

“The Clarity Act’s setback doesn’t change the trajectory,” said Paul McCaffery, head of digital assets at investment bank KBW.

His argument: Congress isn’t the only game in town.

“The SEC and CFTC are already moving proactively to provide the regulatory certainty markets need, and that’s unlocking a wave of M&A across digital assets, traditional financial services, and fintech alike,” McCaffery said.

In fact, just two days after the Senate vote, the SEC approved a temporary “Innovation Exemption” allowing limited trading of tokenized U.S. stocks on certain onchain venues. Then on Oct. 1, the agency proposed a new rule to clarify how investment firms can handle and keep customer crypto assets. Meanwhile, the CFTC has also been removing some regulatory barriers, including providing relief to certain software providers and updating guidance around tokenized investments and blockchain-based recordkeeping.

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