CLARITY Bill Senate Blocked! Polymarket's Anti-Bet 53% Passes

Polymarket prediction markets indicate that the probability of the CLARITY Act (HR 3633) becoming law before the end of 2026 is 53%, an increase of 12% from the previous year. The bill was passed in the House of Representatives in July 2025 with bipartisan support, 294 votes to 134, clearly delineating regulatory authority between the SEC (securities assets) and CFTC (commodity assets).

Bipartisan House Passage, Senate as a Key Battleground

(Source: Polymarket)

The CLARITY Act (officially HR 3633) has achieved a crucial breakthrough in the U.S. House of Representatives. The July 2025 vote resulted in 294 in favor and 134 against, demonstrating rare bipartisan consensus. This cross-party support is especially notable in the currently highly divided American political environment, indicating that cryptocurrency regulatory reform has become a bipartisan priority.

The voting details reveal deeper political dynamics. Republicans supported the bill with 167 votes in favor and 67 against, while Democrats supported it with 127 in favor and 67 against. This division reflects differing positions within both parties on crypto regulation: supporters see it as necessary to promote innovation and maintain U.S. competitiveness, while opponents worry that premature deregulation could undermine investor protection.

However, House approval is only the first step in the legislative process. The CLARITY Act now needs to be approved by the Senate, where the biggest uncertainty lies. In January 2026, a scheduled hearing before the Senate Banking Committee was suddenly canceled, causing market concern. The Senate Banking Committee is the primary body reviewing financial regulation bills, and its progress directly determines whether the bill can proceed to a full Senate vote.

The reason for the cancellation has not been officially disclosed, but industry insiders speculate it may be related to: disagreements among key senators over bill details, other legislative priorities (such as budget bills) occupying the agenda, or regulatory agencies (SEC and CFTC) still holding reservations about jurisdiction. Nonetheless, industry experts remain optimistic, stating that bipartisan compromise could still ensure the bill’s passage.

Polymarket users currently estimate a 53% chance of the CLARITY Act becoming law before the end of 2026, with trading volume exceeding $35,000. This probability has increased by 12% from the previous year, reflecting growing optimism among traders. The advantage of prediction markets is their ability to reflect “smart money” judgments in real time—participants bet with real funds, often making their forecasts more accurate than polls. A 53% probability indicates the market views the bill’s passage as a near toss-up, a cautious optimism that accurately reflects current political realities.

Revolutionary Significance of SEC and CFTC Regulatory Division

The core innovation of the CLARITY Act lies in clearly defining the jurisdiction of the two main regulatory agencies. The SEC will oversee securities-type digital assets, while the CFTC will regulate commodity-type digital assets. This seemingly simple division addresses a fundamental problem that has long plagued the crypto industry.

The biggest current challenge in U.S. crypto regulation is “overlap and vacuum.” Both the SEC and CFTC claim jurisdiction over certain digital assets but lack clear standards for defining “securities” and “commodities.” Former SEC Chair Gary Gensler advocates that nearly all cryptocurrencies should be considered securities, while the CFTC believes mainstream assets like Bitcoin and Ethereum should be classified as commodities. This regulatory uncertainty forces many crypto companies into difficult choices between “high compliance costs” and “enforcement risks.”

The CLARITY Act aims to end this chaos by establishing clear classification standards. Although the full details of the bill are not yet fully disclosed, the known framework includes:

Regulatory Division Principles of the CLARITY Act

Securities Assets (SEC jurisdiction): Tokens raised via ICO, projects with investment contract features, tokens controlled by centralized teams

Commodity Assets (CFTC jurisdiction): Decentralized tokens (e.g., BTC, ETH), assets primarily used for trading and store of value, futures and derivatives markets

Hybrid Classification Mechanism: For projects evolving over time (e.g., shifting from centralized to decentralized), establishing dynamic assessment standards

Safe Harbor Provisions: Providing an 18-36 month compliance buffer for startups, allowing development before clear regulatory requirements are enforced

Supporters argue that this division will reduce confusion, helping crypto companies understand which rules apply to their projects. Clearer regulation can also encourage innovation and reduce the motivation for companies to register overseas. Currently, many U.S.-based crypto startups register in Switzerland, Singapore, or the Cayman Islands due to regulatory uncertainty, leading to talent and capital outflows. If passed, the CLARITY Act could reverse this trend.

However, critics point out that gray areas still remain. For example, who should regulate stablecoins? How to enforce laws when DeFi protocols lack a clear operating entity? Are NFTs securities or commodities? These questions need further clarification during Senate deliberations. Additionally, there are concerns about the differences in budget, manpower, and expertise between the SEC and CFTC, with the CFTC’s resources significantly less than the SEC’s, raising questions about its ability to effectively regulate the rapidly growing crypto market.

Five Major Chain Reactions Triggered by the Bill’s Passage

If the CLARITY Act is enacted in 2026, the U.S. digital asset market is expected to experience significant growth. Clear rules could encourage more projects to operate domestically rather than moving abroad. The potential chain reactions include:

First, exchanges returning to the U.S. market. U.S. exchanges have long complained about unfair regulation, with some operations forced offshore. Once regulation is clarified, these platforms can fully re-enter the U.S. market, relisting tokens previously delisted due to regulatory risks. This would greatly enhance liquidity and competitiveness in the U.S. crypto market.

Second, accelerated institutional investment. Traditional institutions like pension funds, sovereign wealth funds, and insurance companies are highly interested in crypto assets but are constrained by compliance requirements. The CLARITY Act will provide a clear legal framework, potentially unlocking trillions of dollars in incremental capital.

Third, emergence of innovative projects. Many innovative concepts (such as tokenized securities, decentralized identity, on-chain credit scoring) are currently stuck in experimental stages due to regulatory uncertainty. Clear regulation will enable these projects to legally enter the market, accelerating real-world Web3 applications.

Fourth, alignment with international regulation. The EU has passed the MiCA regulation framework for crypto oversight. If the U.S. passes the CLARITY Act, it will create transatlantic regulatory coordination, establishing a unified standard for global crypto markets. Such international cooperation is crucial for cross-border crypto transactions and regulatory arbitrage prevention.

Fifth, political signaling. The passage of the CLARITY Act will send a message worldwide: the U.S. chooses to “embrace innovation” rather than “stifle innovation.” This could prompt other countries to follow suit with friendly regulatory policies, creating a positive global competition in crypto regulation.

Policymakers state that the bill is vital for balancing innovation and investor protection. By clarifying the responsibilities of each agency, the bill aims to prevent overlaps, delays, and confusion in enforcement. Meanwhile, prediction markets like Polymarket provide a unique perspective on public sentiment. A 53% probability indicates a cautiously optimistic market attitude, and observers will continue to monitor legislative progress over time.