The CLARITY Act suffered a significant setback on 15 September, when the US Senate voted 49-50 against advancing the legislation, falling short of the 60 votes required. Although the procedural vote could technically be revisited, the immediate outlook for passage is poor: the November midterm elections are approaching, and legislation that has not passed by the end of the current Congress would generally need to be reintroduced in 2027. The Act is therefore not permanently dead, but its prospects depend on renewed bipartisan negotiations and the composition of the next Congress.
The SEC has continued to develop its own framework. In August, it proposed Regulation Crypto Assets, which would create tailored offering exemptions and a conditional safe harbour for certain crypto-related investment contracts. More recently, on 1 October, it proposed new custody rules intended to provide investment advisers and regulated funds with a clearer route to holding crypto assets for clients. These are meaningful steps towards making digital assets easier to accommodate within the existing securities framework, although the proposals remain subject to consultation and are not yet final rules.
Written by the fund manager.
