Galaxy cuts CLARITY odds to 10%, and crypto's regulatory plan B becomes the plan

Galaxy Digital has cut its estimate of the CLARITY Act's chance of passing in 2026 to 10%, down from the 75% it set on May 22 ^[1][2]. For anyone whose compliance plan assumed a federal market-structure statute for digital assets ^[20], that is a signal to rebuild the plan around agency rulemaking.

The path of the revisions is more informative than the endpoint. Galaxy went from 75% to 60% on June 6, then from 60% to 50% on June 26 ^[3]. The latest move, 40 percentage points, is larger than those first two cuts combined ^[1]. The early cuts read as slipping confidence in the politics. This one is arithmetic about the calendar: the Senate reconvenes on Sept. 14 with 14 days in session ^[4], which Galaxy characterises as roughly two to three weeks ^[5]. Alex Thorn, Galaxy's head of firmwide research, wrote in a Friday X post that unless a motion to proceed comes immediately on lawmakers' return, there is only enough time if the bill "dominates basically the entire working session" ^[6].

The unresolved items are not drafting details. Thorn cited ethics rules covering government officials' involvement in crypto and pressure from banks over stablecoin yield provisions ^[7]. The bill cleared the Senate Banking Committee in May, but most Democrats and the banking industry objected that it would let crypto firms pay yield on stablecoins without the requirements banks face ^[8]. Lobbying volume has not moved that: more than 200 crypto companies and organisations signed a letter urging passage at the beginning of June, shared by Stand With Crypto ^[9].

If the bill fails, the SEC and CFTC plan to write their own crypto market rules ^[10]. The mechanics of that fallback are already visible, and they are messy. The SEC scheduled an open meeting on Friday to unveil its "clear rules of the road," then cancelled it citing "an unforeseen scheduling issue" ^[11]. According to Cointelegraph's account, the White House was unhappy that the SEC moving alone could anger Democrats and damage the CLARITY negotiations ^[12]. The agencies' plan B is therefore hostage to the same politics that stalled plan A.

The deeper problem with agency rules is that they do not settle who is in charge. The CFTC ordered prediction market Kalshi to ignore a New York restraining order and keep operating, treating the state action as a market emergency ^[13], with Chair Michael Selig saying Congress did not intend derivatives exchanges to face a "patchwork of state gaming laws" ^[14]. Days later a Washington state judge ordered Kalshi to stop operating in the state, rejected the federal preemption argument, and required geofencing by Aug. 19 ^[15]. A federal directive lost to a state court inside a week. That is what fragmented rulemaking buys: guidance you can build to, and no assurance it holds.

Three things to watch. Whether a motion to proceed is filed in the Senate's first days back, which is Thorn's stated condition for the timeline working at all ^[6]. Wednesday's White House meeting, where SEC chair Paul Atkins, President Donald Trump and executives from Coinbase, a16z, Ripple, Chainlink, NYSE and Nasdaq are due to discuss getting the bill over the line ^[16], followed the next day by the CFTC's new Innovation Advisory Committee taking up crypto, AI and prediction markets ^[17]. And whether the SEC reschedules the cancelled meeting ^[11], which would indicate the agencies have stopped waiting.