Senate setback leaves crypto rulebook in limbo
The crypto industry’s long-held ambition of a lasting statutory rulebook for digital assets in the United States suffered a significant blow on Sept. 15, when the Clarity Act failed a procedural vote in the Senate. The bill drew 49 votes in favour and 50 against, falling well short of the 60 votes needed to advance. Negotiations had foundered over ethics restrictions covering senior officials’ crypto business interests, including President Donald Trump’s, alongside persistent concerns about investor protection and illicit finance.
The consequences are straightforward. With the November midterms approaching and little legislative time remaining, the defeat sharply reduced the chances of the bill passing this year. The task of defining which digital assets fall under the oversight of the Securities and Exchange Commission and which belong with the Commodity Futures Trading Commission now falls back to the regulators themselves, whose policies can shift between administrations.
That legislative vacuum raises an immediate question for one of the busiest corners of the crypto market: mergers and acquisitions. If Congress cannot deliver certainty, will dealmakers pull back?
The answer, according to bankers and investors who spoke to CoinDesk, is a qualified no. The Clarity Act’s setback has not slammed the brakes on crypto dealmaking. Instead, its effect is likely to be uneven, with transactions in areas where regulators have already provided clearer rules continuing to move, while businesses exposed to unresolved regulatory questions remain harder to buy.
Regulators step into the breach
The most striking feature of the post-Clarity Act landscape is how quickly the SEC and CFTC have moved to fill the gap. Just two days after the Senate vote, the SEC approved a temporary “Innovation Exemption” allowing limited trading of tokenised US stocks on certain onchain venues. Then on Oct. 1, the agency proposed a new rule clarifying how investment firms can handle and safeguard customer crypto assets.
The CFTC has been similarly active, removing regulatory barriers by providing relief to certain software providers and updating guidance around tokenised investments and blockchain-based recordkeeping.
For Paul McCaffery, head of digital assets at investment bank KBW, this regulatory momentum is precisely why the legislative failure does not change the broader trajectory. “The Clarity Act’s setback doesn’t change the trajectory,” he said. “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 argues that the dealmaking impulse is being driven by a structural shift rather than by any single piece of legislation. “We’re in the early innings of a tokenisation and digital payments supercycle that’s building internationally first, but it will inevitably come back to the US, 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 versus building is the more efficient route.”
That view is echoed by Todd White, partner at advisory firm Architect Partners, who expects regulatory action outside Congress to keep activity moving, particularly around tokenisation. “SEC’s decisive move in the wake of legislative failure feels poised to catalyse activity around tokenisation, 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 watched financial markets absorb political disappointment. When the legislative route closes, attention shifts to the administrative one. The SEC’s Innovation Exemption, arriving within 48 hours of the Senate vote, was read by many in the market as a signal that the agency intends to keep the US competitive in tokenisation even without a statutory framework. For acquirers weighing deals in that segment, the message was that the regulatory floor, while not permanent, is being laid plank by plank.
The numbers behind the boom
The data underscores why bankers are reluctant to sound the alarm. Dealmaking in the digital asset sector reached a record $9.7 billion in disclosed deal value in the first half of 2026, up 44% from a year earlier, according to CryptoRank Research.
There is, however, an important caveat. 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-based rise in activity across the sector.
That concentration matters when assessing how the Clarity Act’s failure will filter through. Mega-deals of the kind dominating the current cycle tend to be strategic, well-capitalised and structured with the legal firepower to absorb regulatory ambiguity. Smaller transactions, particularly those involving targets whose core business depends on tokens or activities whose regulatory treatment could still change, are the ones most exposed to the Senate’s inaction.
Payward, the parent company of Kraken, illustrates what is driving the largest deals. The firm agreed to buy payments company Reap for $600 million and derivatives platform Bitnomial for up to $550 million, while Nasdaq agreed to invest $100 million in Payward alongside an expanded commercial partnership.
The common thread in those transactions is an appetite for licences, technology and distribution. Acquirers are not simply betting on crypto prices. They are buying regulated infrastructure, payment rails and customer reach, assets whose value holds up reasonably well even when the statutory picture remains murky. A derivatives platform with CFTC-registered status, or a payments business with licences across jurisdictions, carries embedded regulatory value that does not evaporate because a Senate procedural vote failed.
This helps explain the divergence between the headline deal value, which is at record levels, and the deal count, which is slightly down. The biggest players are consolidating aggressively, while the middle of the market, where targets are more likely to sit on unresolved regulatory questions, is thinner.
Why legislation still matters to some
Not everyone is convinced that agency rulemaking can substitute for legislation. Dmitriy Berenzon, partner at venture firm Archetype, believes a clearer legal framework would meaningfully expand activity beyond the current cohort of large strategic deals.
“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 US as well as abroad,” Berenzon said. “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.”
The GENIUS Act comparison is instructive. Stablecoin legislation gave issuers and their commercial partners a durable legal foundation, and adoption followed. The argument from the pro-legislation camp is that tokenisation, custody and market structure would see a similar acceleration if Congress, rather than the SEC and CFTC acting alone, defined the rules of the road.
There is also a durability problem at the heart of the regulator-led approach. Agency guidance, exemptions and proposed rules can be revised or withdrawn by a future administration. A statute cannot be unwound so easily. For buyers making multi-hundred-million-dollar commitments with multi-year integration timelines, the difference between a rule and a law is not academic. It affects how deals are priced, how representations and warranties are negotiated, and how much risk is allocated to regulatory change provisions.
Jake Brukhman, founder and CEO of venture capital firm CoinFund, offered a more holistic view of the market’s trajectory, suggesting that the forces driving consolidation extend beyond the regulatory question alone.
Outlook: a two-speed market
The most likely near-term outcome is a two-speed crypto M&A market. In the fast lane sit tokenisation, custody, payments and infrastructure deals, where the SEC and CFTC have already sketched workable rules and where acquirers like Nasdaq and Payward are willing to commit nine-figure sums. In the slow lane sit targets whose value depends on unresolved questions, token classification chief among them, which will remain harder to buy and harder to price until Congress revisits the issue.
The midterms will shape what comes next. A post-election Congress with renewed appetite for digital asset legislation could revive the Clarity Act or a successor bill, potentially unlocking the broader wave of partnerships that Berenzon describes. Until then, the burden falls on the SEC and CFTC, whose recent pace suggests they understand the assignment.
For now, the bankers’ message is consistent: the absence of a statute is a drag at the margins, not a wall. The record $9.7 billion in first-half deal value, up 44% year over year, was achieved without the Clarity Act. The deals getting done are being underwritten by regulatory momentum at the agencies and by the strategic logic of buying licences, technology and distribution rather than waiting for Washington.
The risk is concentration. With 76% of disclosed value sitting in just four transactions, the boom rests on a narrow base of well-resourced buyers. If agency rulemaking stalls, or if a future administration reverses the Innovation Exemption and related measures, that narrow base could narrow further. The market has decided it can live without Congress for now. Whether it can thrive without Congress is a question the next session will have to answer.
For more on the legislative picture, see our regulation coverage.
