Senate setback fails to dent record crypto M&A appetite
The Clarity Act’s failure to advance in the U.S. Senate has sharply reduced the chances of comprehensive digital asset legislation passing this year, yet bankers and investors say crypto dealmaking will keep rolling regardless.
The bill, which would have clarified which digital assets fall under the oversight of the Securities and Exchange Commission and which sit with the Commodity Futures Trading Commission, fell short in a procedural vote on Sept. 15. It drew 49 votes in favour and 50 against, short of the 60 needed to advance. Negotiations had foundered over ethics restrictions on senior officials’ crypto business interests, including President Donald Trump’s, alongside concerns about investor protection and illicit finance. U.S. Sen. Cynthia Lummis, Republican of Wyoming, has been among the bill’s champions.
With the November midterms approaching and little legislative time remaining, regulators are now left to fill the gap. That raises an awkward question for one of crypto’s most active corners: mergers and acquisitions, which hit record levels in the first half of 2026.
The numbers underline why the stakes matter. Disclosed deal value in the digital asset sector reached a record $9.7 billion in the first half of 2026, up 44% from a year earlier, according to CryptoRank Research. There is a caveat, though. The number of announced acquisitions fell 8% year over year to 87, and the four largest deals accounted for 76% of disclosed value. The market is being driven by a handful of large transactions rather than a broad rise in activity.
For broader context on the legislative backdrop, see our regulation coverage.
Why the Clarity Act mattered
The crypto industry had waited years for Congress to deliver a lasting U.S. rulebook for digital assets. Such a framework would have provided greater certainty for businesses and investors than relying largely on regulators whose policies can change between administrations.
On the face of it, one might think the bill’s failure would dampen dealmaking. Regulatory uncertainty makes it harder for potential buyers, especially traditional financial firms, to pursue acquisitions in the U.S., particularly when the target’s business depends on tokens or activities whose regulatory treatment could change.
But bankers and investors who spoke to CoinDesk do not expect the setback to slam the brakes on crypto M&A. Instead, they see a more uneven effect. Deals in areas where regulators have already provided clearer rules may keep moving, while businesses exposed to unresolved regulatory questions could remain harder to buy.
“The Clarity Act’s setback doesn’t change the trajectory,” said Paul McCaffery, head of digital assets at investment bank KBW. His argument is that Congress is not the only game in town. “The SEC and CFTC are already moving proactively to provide the regulatory certainty markets need, and that’s unlocking a wave of M&A across digital assets, traditional financial services, and fintech alike,” McCaffery said.
Regulators step into the vacuum
The most striking evidence that the executive branch is filling the legislative void came almost immediately after the Senate vote. Just two days later, on Sept. 17, the SEC approved a temporary “Innovation Exemption” allowing limited trading of tokenized U.S. stocks on certain onchain venues. Then, on Oct. 1, the agency proposed a new rule to clarify how investment firms can handle and keep customer crypto assets.
The CFTC has also been removing regulatory barriers. It has provided relief to certain software providers and updated guidance around tokenized investments and blockchain-based recordkeeping.
McCaffery argues the direction of travel is unmistakable. “We’re in the early innings of a tokenization and digital payments supercycle that’s building internationally first, but it will inevitably come back to the U.S., and those who wait for Congress will miss the boat,” he said. “It’s taken a long while to get here, but the convergence is real and buying vs. building is the more efficient route.”
Todd White, partner at advisory firm Architect Partners, similarly expects regulatory action outside Congress to keep activity moving, particularly around tokenization. “SEC’s decisive move in the wake of legislative failure feels poised to catalyze activity around tokenization, for both commercial traction and strategic transactions,” White said. “We’d already seen significant shifts toward more liquid assets and institutional finance. The new ‘Innovation Exemption’ should bolster that momentum.”
The pattern here is familiar to anyone who has followed prior cycles of regulatory drift: when statute is absent, administrative action becomes the de facto rulebook. That carries its own risks, since guidance and exemptions can be withdrawn by a future administration just as easily as they were granted. It is precisely this fragility that the Clarity Act was designed to eliminate.
Big deals keep coming
The recent transaction pipeline suggests buyers are not waiting for Washington. Payward, the parent company of Kraken, provides a clear example of what is driving some of the largest deals. The company agreed to buy payments firm Reap for $600 million and derivatives platform Bitnomial for up to $550 million. Separately, Nasdaq agreed to invest $100 million in Payward alongside an expanded commercial partnership.
Those deals highlight the appetite for licenses, technology and distribution that could sustain activity even as comprehensive U.S. crypto legislation remains stalled. Exchanges buying payments infrastructure, derivatives venues and institutional distribution channels are effectively acquiring regulatory permissions and market access in a single transaction, a strategy that reduces dependence on the outcome of any single bill.
The concentration of value in a handful of large deals also tells its own story. When four transactions account for more than three-quarters of disclosed value, the market is being shaped by strategic consolidators rather than a broad base of mid-market buyers. That is a market structure that can keep producing headline numbers even if the long tail of smaller deals thins out.
Legislation still has its advocates
Not everyone thinks regulatory action by the SEC and CFTC can substitute for legislation. “Clearer legal framework would absolutely result in more deals, more partnerships permeating across financial services and beyond, and ultimately more economic prosperity for both citizens in the U.S. as well as abroad,” said Dmitriy Berenzon, partner at venture firm Archetype.
He pointed to precedent. “We have already seen how much of a positive impact the GENIUS Act has had on stablecoin adoption, so the more clear and informed the rulemaking, the better,” Berenzon said. The stablecoin statute’s effect on adoption is the industry’s strongest talking point for why congressional action, rather than agency guidance alone, delivers durable commercial results.
Jake Brukhman, founder and CEO of venture capital firm CoinFund, offered a more holistic view of the landscape.
The outlook: uneven momentum into the midterms
The picture heading into the November midterms is one of uneven momentum. Dealmaking in tokenization, custody, payments and other areas where the SEC and CFTC have moved first is likely to keep building, because buyers can underwrite the regulatory risk with reasonable confidence. Businesses whose value depends on unresolved questions, particularly around token classification, will remain harder to price and therefore harder to buy.
The record $9.7 billion first half shows the market has already priced in a degree of tolerance for uncertainty. But the 8% fall in deal count is a warning that the boom is narrow rather than broad. If the Clarity Act or something like it returns after the midterms with the ethics disputes resolved, the likeliest effect would be to widen the funnel of transactions, drawing in the mid-market buyers and traditional financial institutions that have so far sat on the sidelines.
Until then, the market will take its cues from Washington’s regulators rather than its legislators. On the evidence of the past three weeks, that has been enough to keep the largest deals moving. Whether it is enough to sustain a genuine broadening of crypto M&A is the question the next Congress will have to answer.
For more on how policy shifts are shaping digital asset markets, see our Bitcoin coverage.
