Crypto : The Clarity Act Threatened After The Democrats' Victory

The Clarity Act risks being blocked after the Democrats’ victory in the U.S. elections on November 3, 2026. The party won both chambers of Congress, changing the outlook for crypto regulation in the United States. In an analysis published November 6, Galaxy Digital expects little progress on major sector reforms. Elizabeth Warren and Maxine Waters could notably retake leadership of strategic financial committees.

The Clarity Act loses its chances in Congress

The election result seriously complicates the future of the Clarity Act. The text had already failed in the Senate on September 15 with 49 favorable votes against 50 oppositions. It needed 60 votes to pass this procedural step.

The Republicans then held the majority in both chambers. This will no longer be the case from January 2027. The Democrats won seven additional seats in the Senate in the November 3 elections. They also obtained a majority in the House of Representatives, ending two years of Republican control of Congress.

Alex Thorn, Head of Research at Galaxy Digital, does not expect significant progress on major crypto legislation under this new majority. The Clarity Act was supposed to clarify the responsibilities of the SEC and the CFTC in overseeing digital assets.

The House had adopted its version of the text in July 2025, with 294 votes in favor against 134. In the Senate, negotiations long focused on stablecoin rewards, developer protection, and conflicts of interest among politicians.

Despite several compromises, no final agreement was reached. The new Democratic majority could choose to take up certain provisions again or work on a different project. The current text has not been officially abandoned.

Elizabeth Warren and Maxine Waters regain influence

The change in majority will have consequences on the leadership of parliamentary committees. Galaxy estimates that Elizabeth Warren could chair the Senate banking committee. Maxine Waters is expected to regain leadership of the House Financial Services Committee.

These two Democratic leaders have advocated for stricter crypto activity regulations for several years. Their return to important positions could shift legislative priorities. Galaxy also reports that House Democrats are discussing a project inspired by investor protection proposals defended by Maxine Waters in 2025.

It could serve as a basis for new legislation on the crypto market structure. The elections also yielded mixed results for candidates supported by the industry. According to researcher Molly White’s tracking cited by Galaxy, candidates backed by crypto and AI funding committees lost nine of the twelve competitive elections with results known as of November 4.

However, the forty candidates supported in districts considered less contested won their races. Several digital asset defenders also retained their seats, notably Democrats Josh Gottheimer and Ritchie Torres.

Differences between the two parties therefore do not mean that all Democrats oppose crypto. In September, Republicans had even incorporated 126 amendments requested by Democrats in their latest Clarity Act proposal. The compromise was not enough.

Crypto regulation could advance without the Clarity Act

The likely failure of a new legislative attempt does not mean U.S. regulation will remain static. Galaxy reminds that the SEC, CFTC, and banking authorities already have powers to clarify the rules applicable to crypto companies.

The Trump administration can continue these efforts during the remaining two years of its term. These administrative measures, however, do not replace all the provisions that a federal law could establish.

Congress retains an essential role to durably define regulators’ competences and set the legal obligations of platforms. The new majority can also hold hearings and request documents from companies or public officials.

Donald Trump’s crypto activities are among issues likely to receive more attention. World Liberty Financial, its USD1 stablecoin, and financial links between the presidential family and several foreign investors could be subject to new investigations.

These possible procedures remain separate from the adoption of the Clarity Act. Democrats will also have to take into account the position of crypto-friendly elected officials within their own camp.

For the industry, upcoming discussions could therefore focus more on consumer protection, conflicts of interest, and the powers of supervisory authorities.

The Clarity Act has not yet received a new voting date. Meanwhile, Democrats are already preparing investigations into the Trump family’s crypto activities. In Washington, the sector will now have to deal with a Congress less favorable to some of its priorities, without however seeing all possibilities for compromise disappear.