Although the Clarity Act failed to clear a procedural ballot in the Senate on Tuesday, it is not entirely finished, though the timeline for approving the crypto market structure legislation this year is exceptionally tight and shrinking rapidly, according to JPMorgan analysts.
The Senate vote resulted in a 49-50 tally, falling short of the 60 votes required to advance the measure. A number of Democratic lawmakers who helped write and negotiate the proposal cast negative votes. Significantly, Senator Thom Tillis switched his vote to 'no' at the last minute and entered a motion for reconsideration. JPMorgan analysts noted that this procedural maneuver enables Senate Republicans to reintroduce the bill to the floor.
"Recall, the GENIUS Act (now law) also failed its first cloture vote, so there is precedent in crypto-related legislative proceedings," stated JPMorgan analysts led by Kenneth Worthington in a Wednesday research note.
"We understand that the bill remains on the Senate calendar and leadership could call for another vote before this Congress adjourns at the end of the year," they added.
Nevertheless, the remaining window is very restricted. The analysts observe minimal momentum for additional negotiations during the approximately two and a half weeks of Senate schedule left prior to the midterm elections or throughout the subsequent lame-duck session.
They pointed out that primary proponents of the legislation have expressed frustration regarding the talks and may prove less inclined to keep discussing amendments or push for extra Senate floor time.
Focus shifts to regulators
As the prospects for the bill diminish, the analysts anticipate that investors and participants in the crypto market will shift their attention toward the Securities and Exchange Commission and the Commodity Futures Trading Commission.
These agencies might establish regulations offering a degree of predictability for digital asset enterprises and encouraging additional capital deployment into the industry. Yet, the analysts cautioned that such guidelines carry less permanence than an act passed by Congress.
"While agency rulemaking may establish some guardrails to appease the crypto-ecosystem and instill some confidence into incremental capital flows, we acknowledge that agency rulemaking is less durable than legislative statutes since the agency itself can repeal or amend its rules in subsequent administrations and is vulnerable to courts, whereas repealing statutes would require another act of Congress," the analysts wrote.
SEC Chair Paul Atkins and CFTC Chair Michael Selig published separate statements on Wednesday indicating their intention to proceed with crafting regulations for the digital asset sector.
The sector is monitoring closely for a prospective SEC 'innovation exemption' directed at crypto projects, such as tokenized equities, according to the analysts. They mentioned that reports indicated the SEC was holding off to see whether the Clarity Act secured approval before advancing its own initiative.
Reactions to the failed Clarity Act procedural vote
Galaxy founder and CEO Mike Novogratz held both political sides responsible for the unsuccessful vote, stating that disputes over government ethics stipulations prevented a wider compromise.
Novogratz expressed continued optimism that the SEC and CFTC will move forward with establishing crypto regulations, which Congress might subsequently codify into law to supply long-term stability.
Mizuho Securities similarly indicated that focus could pivot back toward the SEC and CFTC following the defeated vote, with regulators enacting policies through guidance and rule formulation instead of waiting for legislative action.
The financial institution stated that pullbacks in Circle and Coinbase equities were logical given ongoing ambiguities surrounding stablecoin yield. However, Mizuho maintained that Robinhood, Figure, and Strategy were suffering 'undue punishment.'
It highlighted that 80% to 90% of Robinhood revenue does not derive from crypto, whereas Figure primarily runs a home equity line of credit marketplace. Strategy maintains exposure to bitcoin pricing, but recent cryptocurrency capital flows imply that medium-term market sentiment remains positive, the firm observed.
TD Cowen analyst Lance Vitanza also observed that near-term enactment of the Clarity Act now appears increasingly improbable, though regulatory updates continue progressing via SEC rule-making.
Vitanza noted that legislation remains the preferred permanent solution, even though regulators can potentially mitigate several of the digital asset industry's immediate worries. He forecasts continued evolution for the sector, though likely at an irregular tempo.
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Originally published at https://www.theblock.co/news/regulation/2026-09-16-jpmorgan-clarity-act-crypto-bill-415280.
