Galaxy Research Director: Probability of CLARITY Act passing this year lowered to 10%, with political divisions cited as the main obstacle

Alex Thorn, head of research at Galaxy, published a note cutting the probability of the CLARITY Act passing in 2026 to 10%. He noted the bill’s core hurdles now stem more from political than policy factors, including ethical restrictions on government officials engaging with the crypto industry, opposition from the banking sector—especially community banks—and disputes over developer protection provisions. Thorn added that Senate Majority Leader John Thune has scheduled the Senate to hold its first vote on the CLARITY Act shortly after it wraps up its recess in mid-September, leaving only a roughly two to three week window to advance the legislation. If senators fail to immediately launch the advancement process upon returning to Washington, the bill would need to occupy nearly the entire legislative session to have any chance of passing in 2026. Separately, the U.S. Securities and Exchange Commission (SEC) had planned to advance two crypto regulatory measures: Reg Crypto and the "Innovation Exemption," but both have recently been delayed again. Thorn believes the SEC had previously delayed action at least in part to avoid disrupting CLARITY Act negotiations, and now that the bill is stalled, the regulator may accelerate advancing its independent regulatory framework. He projects that regardless of whether the CLARITY Act ultimately passes, the SEC is likely to release the full text of Reg Crypto, the "Innovation Exemption," or both in the coming weeks to months.