The Democratic Party’s takeover of both chambers of the US Congress could leave the crypto industry waiting for at least two years for the CLARITY Act.
This is according to analyst Ash Crypto, who says that the results have complicated President Donald Trump’s plans for the US to become a global hub for crypto.
Democrats Midterm Victory Complicates CLARITY Act’s Prospects
In a November 5 post on X, Ash recalled that Democrats unanimously opposed the legislation during a Senate vote in September, denying Republicans the 60 votes they needed to advance it. And now, with the party flipping seven seats in the midterms to take its numbers in the House to 54, the analyst says things will only get much more difficult.
“Republicans will now need Democratic support to pass major pro-crypto legislation, and with Democrats’ anti-crypto stance, it looks tough now,” wrote the analyst.
He also suggested that the Dems could push for much more severe rules on digital assets and crypto exchanges, with plans reportedly in the works to give the SEC more oversight while limiting the CFTC’s authority. All this, according to him, could see a pause in institutional adoption as banks and big investors become more cautious about venturing into crypto given the potential lack of clear federal rules.
“That doesn’t mean crypto adoption will stop, but it could push many crypto builders offshore,” the commentator concluded.
Although regulatory agencies like the SEC and CFTC can issue guidance and change certain rules, legislation would provide a more durable framework across different administrations, and with Democrats now set to influence both chambers, CLARITY’s prospects could now depend on negotiations that the industry had hoped to avoid.
Remember, the September vote only asked whether the bill could move toward a final vote, not whether it would become law, and soon after the setback, seven Democratic lawmakers, among them Senators Kirsten Gillibrand, Cory Booker, Ruben Gallego, and Georgia’s Raphael Warnock, issued a statement indicating that they hadn’t given up on the legislation, which they said they had spent the last two years working to pass.
The Return of a Crypto Critic
Another thing that may have the crypto industry worried is the return to Washington of critical voices like Ohio Senator Sherrod Brown, whom they spent more than $40 million to help defeat in 2024, but a similar campaign this time, where crypto-focused PACs spent even more ($64 million), did not have the same impact.
When he was chair of the Senate Banking Committee, Brown had asked for the banning of crypto, suggesting it was a hotbed for Ponzi schemes, had poor consumer protections, and was a national security threat, claiming that it was being used by “Korean cybercriminals,” drug traffickers, and terror financiers.
Still, some industry watchers believe that regardless of the potential slowing down of crypto legislation or the introduction of tougher conditions for the sector, crypto has become “too big” to be stopped by a change in political leadership.
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