Clarity Act passage odds sink to 32% as Senate ethics talks stall

The odds of the Clarity Act becoming law this year have fallen to their lowest level on prediction market Polymarket, as Senate negotiations over a bipartisan ethics provision remain unresolved.

Traders on Polymarket now give the legislation a 32% chance of passing by Dec. 31, 2026, down roughly 30 percentage points from when the market launched on Jan. 11, according to the platform. The odds climbed as high as 82% on Feb. 19 but have steadily declined since early May as the Senate's legislative calendar has narrowed and questions have mounted over whether lawmakers can assemble the bipartisan support needed to advance the bill.

"The community has already done the hard work," Sarah Aberg, an executive at Nova Labs, told lawmakers during a House hearing Friday marking one year since the chamber passed the legislation. "Clarity is not a call for deregulation; it is a call for the right regulation from the right regulator." Aberg argued that regulatory uncertainty delayed investment in the Helium wireless network after the SEC sued the company in a case that was later settled.

The lack of an ethics provision remains one of the biggest sticking points. Sen. Ruben Gallego (D-Ariz.), one of two Democrats who voted to advance the bill out of the Senate Banking Committee, has repeatedly said he will not support the legislation on the Senate floor without a bipartisan ethics provision. Other Democrats have raised similar concerns over conflicts of interest involving public officials and digital assets. As of Friday, there had been no public readout from a White House meeting with Senate Republicans, and no bipartisan ethics language had emerged.

If passed, the Clarity Act would establish a federal framework for digital asset markets by drawing a clearer line between assets regulated by the Securities and Exchange Commission and those overseen by the Commodity Futures Trading Commission. Supporters argue the measure would replace years of regulation through enforcement with rules written by Congress. Bullish executive Randy Abernethy said companies need "a rule book" that brings digital asset markets under U.S. oversight rather than driving firms abroad. WisdomTree's Ryan Louvar said legislation would create durable rules that survive changes in administrations, while Coin Center's Jason Sommensatto argued the bill protects software developers without weakening anti-money laundering or investor safeguards.

What's at stake for crypto markets

The declining odds of passage signal continued regulatory uncertainty for U.S. digital asset markets. If the Clarity Act fails to advance, the SEC and CFTC will continue to regulate cryptocurrencies through enforcement actions rather than clear congressional rules — a dynamic that industry executives say has pushed firms to operate offshore. With Congress approaching its August recess and midterm elections scheduled for November, the legislative window for the bill is narrowing rapidly. Lawmakers have been working on an updated legislative text, though it has yet to win Democratic backing.

This article is for informational purposes only and does not constitute investment advice.