The Clarity Act failed a Senate procedural vote on September 15, drawing 49 votes in favor and 50 against, well short of the 60 needed to advance. Crypto dealmaking did not slow down with it.
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. The number of announced acquisitions fell 8% year over year to 87, and the four largest deals made up 76% of disclosed value, so a handful of big transactions drove the record more than a broad rise in activity did.
Negotiations had foundered over ethics restrictions on senior officials’ crypto holdings, including President Donald Trump’s, alongside investor protection and illicit finance concerns. With the November midterms approaching and little legislative time left, the defeat sharply cut the odds of passage this year. That left regulators to fill the gap, and left dealmakers to decide whether agency rulemaking is enough.
Regulators step in where Congress stalled
Two days after the Senate vote, the SEC approved a temporary Innovation Exemption allowing limited trading of tokenized U.S. stocks on certain onchain venues. The relief runs under Exchange Act Section 36 and covers permissioned automated market makers and liquidity pools, with liquidity providers that fund those pools exempt from the dealer definition. On October 1 the agency proposed a new custody rule spelling out how investment advisers and funds can hold customer crypto assets, a framework that would let some funds self-custody through qualifying custodians.
The CFTC has been moving on its own side. The agency sent a rulemaking titled Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets to the White House budget office on September 17, still at the pre-rule stage, and updated guidance around tokenized investments and blockchain-based recordkeeping. Paul McCaffery, head of digital assets at investment bank KBW, told CoinDesk the agencies’ actions are what keep activity going.
“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,” said Paul McCaffery of KBW.
McCaffery added that buying beats building in the current phase. “We’re in the early innings of a tokenization and digital payments supercycle that’s building internationally first, but it will inevitably come back to the U.S., and those who wait for Congress will miss the boat.”
The deals show an uneven pattern
Payward, Kraken’s parent company, agreed to buy payments firm Reap for $600 million and derivatives platform Bitnomial for up to $550 million in cash and stock, while Nasdaq agreed to invest $100 million in Payward as part of an expanded commercial partnership. Those transactions target licenses, technology and distribution rather than betting on a Senate bill. BNY has also been in talks with Payward over an infrastructure partnership spanning digital assets, custody, trading and payments.
Todd White, partner at advisory firm Architect Partners, said the SEC’s response to the legislative failure should keep tokenization deals moving. “SEC’s decisive move in the wake of legislative failure feels poised to catalyze activity around tokenization, for both commercial momentum and strategic transactions. We’d already seen significant shifts toward more liquid assets and institutional finance. The new ‘Innovation Exemption’ should bolster that momentum.”
The counterargument: rules beat guidance
Not everyone thinks agency rulemaking can stand in for legislation. “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 U.S. as well as abroad,” said Dmitriy Berenzon, partner at venture firm Archetype, pointing to the GENIUS Act’s measurable impact on stablecoin adoption as evidence that statutes move markets in a way guidance does not.
Jake Brukhman, founder and CEO of CoinFund, framed the setback differently from both camps. “Failure of Clarity does not create a new drag so much as preserve the regulatory uncertainty already weighing on the sector,” he said, noting that the impact lands unevenly. “It prevents a meaningful regulatory de-risking that could have accelerated dealmaking, particularly for token-centric companies and pre-token financings. Equity-based infrastructure, payments, and businesses operating under clearer existing rules should be less affected.”
Will Nuelle, general partner at Galaxy Ventures, expects deal activity to keep concentrating in categories the SEC and CFTC have already de-risked, such as exchange infrastructure, spot trading and tokenized collateral. His firm sees those categories as the main place the record M&A numbers can hold up without a new law.
The legislative math left
The Senate vote split 49 to 50 on a procedural motion requiring 60 votes to advance. Several senators who supported crypto legislation previously voted no. State regulators also pushed back: a group of state securities and banking regulators signed a letter objecting that the bill would let the SEC preempt state registration regimes, give the agency unilateral discretion to reset the scope of federal preemption, and weaken state anti-fraud enforcement against crypto scams.
Midterms land in early November, and the current Congress has few working days left. Ryan Chan-Wei of the Cato Institute wrote in a CoinDesk opinion piece that progress effectively resets when the new Congress is sworn in, because key senators who quarterbacked the bill will not be on the ballot again.
Until then, the industry operates on agency guidance, a custody proposal the SEC opened for comment on October 1, and case law nobody wrote in 2026. The numbers say buyers are not waiting for a cleaner map. The open question is whether token-centric businesses, the ones Brukhman flagged as most exposed, can hold out until one arrives.