Multiple independent gauges of the CLARITY Act’s odds of becoming law in 2026 have moved lower this week, even as the two federal agencies the bill would restructure, i.e. the SEC and the CFTC, took visibly different approaches to the vacuum Congress has left behind. Galaxy Research, the research arm of digital-asset firm Galaxy Digital, said in an August 14 note that it is lowering its own odds of passage to 10%, down from 60% after a bipartisan Senate Banking Committee markup in May and 30% by late July. Separately, and independently of Galaxy’s estimate, betting odds on prediction market Polymarket for CLARITY Act passage in 2026 fell from about 82% to roughly 16% over a similar period, according to crypto.news.
The same week, the SEC appeared twice to be on the verge of unveiling major crypto rulemaking, only to pull back both times, including canceling its planned August 14 open meeting, amid reported opposition from a Wall Street trade group and concerns raised by the White House. The CFTC, by contrast, took an aggressive stance defending its jurisdiction over prediction markets against a New York state lawsuit. None of the odds cited here are guarantees; they are estimates from a research firm and a speculative betting market, respectively, and both can be wrong.
Why the Odds Are Falling
Galaxy’s note, written by Head of Firmwide Research Alex Thorn, lays out a chain of obstacles that, in the firm’s assessment, have eroded the CLARITY Act’s momentum since May. As The Crypto Times has reported, the Senate ultimately declined to hold a pre-recess vote, instead teeing up a possible procedural vote for mid-September. Galaxy attributes the stall to an unresolved dispute over ethics controls for government officials’ crypto holdings, tied to President Trump’s own digital-asset businesses, alongside rising lobbying from community banks concerned about stablecoin-driven deposit flight, and a compressed calendar: the Senate reconvenes September 14 and is expected to adjourn around October 2 for midterm campaigning, leaving only two to three working weeks.
Polymarket’s independently crowdsourced odds, which fell from roughly 82% to about 16% over a comparable window, point in the same direction as Galaxy’s estimate without being derived from it, for readers weighing how much confidence to place in either figure, it is notable that two differently constructed gauges, one a research analyst’s judgment and the other a real-money betting market, have converged on a similarly pessimistic outlook, even though the specific numbers differ by several points.
The SEC’s Retreat, and Who Is Pushing Back
The SEC has been sitting on two distinct pieces of crypto rulemaking, both associated with Chair Paul Atkins’s broader “Project Crypto” agenda: “Regulation Crypto Assets,” which would create a new registration pathway for crypto asset offerings, and a separate “Innovation Exemption,” which would let firms test blockchain-based trading of tokenized U.S. equities under a time-limited regulatory sandbox. Both had appeared close to release in May, per Bloomberg’s reporting at the time, before the SEC pulled back.
In addition, according to industry sources familiar with the discussions, the Securities Industry and Financial Markets Association (SIFMA), the Wall Street trade group representing major broker-dealers and investment banks, has emerged as a leading voice opposing the Innovation Exemption. SIFMA’s specific substantive objection centers on how blockchain-based trading venues and automated market makers would satisfy brokers’ existing “best execution” obligations under Regulation NMS, the rule governing how brokers handle competing market prices. The group has argued that market-structure changes of this significance should proceed through formal notice-and-comment rulemaking rather than an exemption.
Separately, White House officials raised concerns that unilateral SEC action could complicate the ongoing congressional negotiations over the CLARITY Act’s own tokenization language, a specific, sourced explanation for the SEC’s caution, rather than the inference Galaxy’s note draws from the timing alone. As The Crypto Times reported, the Innovation Exemption’s latest delay on August 13 has also indicated the holdup relates specifically to Section 10505 of the CLARITY Act, the provision governing how tokenized securities would be regulated under the bill; advancing an SEC exemption before Congress finishes negotiating that section risks unsettling a compromise months in the making, according to that reporting. Separately, some reporting has indicated SEC staff have also been examining whether the agency has sufficient legal authority and economic-analysis support to grant relief of this scope, suggesting the delay may reflect genuine internal deliberation at the agency, not solely external pressure.
That broader context reframes the SEC’s cancellation of its August 14 open meeting, which the agency attributed only to an “unforeseen scheduling issue.”
The CFTC Draws a Harder Line
The same week brought a sharper, more confrontational move from the CFTC. On August 11, the commission invoked its emergency authority under the Commodity Exchange Act after Kalshi notified it of what the exchange called a market emergency. The emergency stemmed from a lawsuit New York Attorney General Letitia James filed in state court on July 31, seeking a temporary restraining order that would block Kalshi from offering any event contracts nationwide, not just sports-related contracts, along with more than $36 billion in damages.
The CFTC’s order directed Kalshi to continue operating under the Commodity Exchange Act’s core principles despite the state action. CFTC Chairman Michael S. Selig framed the intervention bluntly: “New York intends to make event contract derivatives waste away under its iron curtain of state gaming laws before the courts get the chance to issue final rulings,” he said, arguing Congress never intended interstate derivatives exchanges to be regulated under “a patchwork of state gaming laws.” The CFTC’s release also disclosed the scope of the underlying fight: the commission has filed lawsuits against nine states — Arizona, Connecticut, Illinois, Kentucky, Minnesota, New Mexico, New York, Rhode Island, and Wisconsin — to defend what it considers its exclusive jurisdiction over prediction markets, and has filed amicus briefs in three additional appellate proceedings.
New York’s underlying lawsuit and its claims against Kalshi have not been ruled upon in court, and the CFTC’s emergency order is itself a contested assertion of federal authority that New York is likely to dispute further. Neither New York’s Attorney General’s office nor Kalshi chose to respond to the CFTC order as of publication.
Reading the Different Estimates Together
It is worth being precise about what each figure in this story represents, since they come from different kinds of sources with different limitations. Galaxy’s 10% is one research firm’s proprietary, analyst-driven judgment, informed by its reading of the legislative calendar and the unresolved ethics dispute; Galaxy Digital itself holds financial interests across the digital-asset industry, giving it a stake in how the story is ultimately framed, even where its analysis appears carefully reasoned.
Polymarket’s roughly 16% is a real-money betting market, which aggregates the views of many traders but is also subject to thin liquidity and speculative distortion on lower-volume contracts. Neither is an authoritative forecast, and both should be read as inputs rather than conclusions. What the two figures share, a sharp decline from more optimistic readings earlier in the summer, is the more durable signal, corroborated by the concrete, on-the-record events of the past week: a canceled SEC meeting, a named trade group’s stated objections, and reported White House caution.
The Bottom Line
Taken together, the week’s events show a Congress that has stalled, an SEC caught between competing pressures from Wall Street, the White House, and its own procedural concerns, and a CFTC willing to assert its authority aggressively where it believes it has a clear legal footing.
Whether the CLARITY Act ultimately passes in 2026, and whether the SEC’s rulemaking proceeds in its absence, remain open questions that this report does not attempt to predict. Readers should treat both Galaxy’s 10% figure and Polymarket’s odds as informed but fallible estimates, not settled outcomes, and none of this is investment advice.
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