Clarity Act Fails Senate Vote, but Crypto M&A Expected to Continue

The U.S. Senate blocked the Clarity Act in a procedural vote on Sept. 15, with 49 senators in favor and 50 against. The bill needed 60 votes to move forward. Negotiations had stalled over ethics restrictions on senior officials’ crypto business interests, including those of President Donald Trump, as well as investor-protection and illicit-finance concerns. With November midterms approaching and little legislative time remaining, the defeat sharply reduced the chances of passage this year, leaving regulators to fill the gap.

That outcome might seem to hurt crypto M&A, because regulatory uncertainty can make buyers—especially traditional financial firms—wary of U.S. targets whose tokens or activities could face changing treatment. But bankers and investors who spoke to CoinDesk do not expect the Clarity Act’s failure to slam the brakes on crypto dealmaking. Instead, they foresee an uneven market: transactions in areas with clearer regulatory rules may proceed, while businesses tied to unresolved questions could remain harder to buy.

Paul McCaffery, head of digital assets at investment bank KBW, told CoinDesk that the legislative setback “doesn’t change the trajectory.” He argued that Congress is not the only source of regulatory clarity, pointing to proactive moves by the SEC and CFTC. According to McCaffery, those efforts are unlocking M&A across digital assets, traditional financial services, and fintech.

Regulators have continued to act. Two days after the Senate vote, the SEC approved a temporary “Innovation Exemption” that allows limited trading of tokenized U.S. stocks on certain onchain venues. On Oct. 1, the SEC proposed a rule to clarify how investment firms can handle and safeguard customer crypto assets. The CFTC has also removed some barriers, including relief for certain software providers and updated guidance on tokenized investments and blockchain-based recordkeeping.

The Clarity Act’s stall leaves the crypto industry without the lasting statutory framework it has sought for years, one that would divide oversight between the SEC and CFTC. For now, dealmaking may depend less on Congress and more on how quickly those agencies provide certainty in specific areas. The November midterms and the limited legislative calendar mean a legislative fix is unlikely in the near term.