119th Congress ends - CLARITY Act expires if not passed

The 119th US Congress ends on January 3, 2027. If the Senate and House have not agreed on a common text of the CLARITY Act (H.R. 3633) by then, the crypto market-structure bill expires and the new Congress must start over.

What is happening

The CLARITY Act, in full the Digital Asset Market Clarity Act, would split oversight of crypto-assets between the SEC and the CFTC and require crypto exchanges to register at federal level. The House passed it on July 17, 2025 by 294 votes to 134. In the Senate, the motion to open debate failed on September 15, 2026 by 49 votes to 50; 60 were needed. As of October 22, 2026, no new vote is scheduled.

Formally the bill remains alive. H.R. 3633 sits on the Senate's legislative calendar, and a motion to reconsider filed by Senator Thom Tillis on the day of the vote allows the failed vote to be rescheduled. The remaining calendar is tight: the US midterm elections take place on November 3, 2026, followed by a lame-duck session that runs until the Congress ends. Because the Senate and House versions differ, both chambers would have to agree on one common text before the deadline.

The dispute centres on ethics rules tied to the crypto businesses of the President and his family. Senator Cynthia Lummis, who is not standing for re-election, has said she will keep campaigning for the law until she leaves office. In the meantime, regulators are acting on their own: on March 17, 2026, the SEC, supplemented by CFTC guidance, issued an interpretation sorting crypto-assets into five groups.

Why it matters

The bill would replace case-by-case court decisions on whether a token is a security with fixed categories, including "digital commodity." For exchanges, it would mean a single federal authorisation for spot trading instead of state-by-state licences and the risk of SEC lawsuits. It also covers custody of client assets, anti-money-laundering duties and an exemption for token sales of up to $50 million in any twelve months.

If the deadline passes without a common text, the legislative process would restart in the new Congress, prolonging uncertainty over which agency oversees which token. The source article's own assessment, marked as such, is that passage in 2026 is unlikely and that US crypto rules are more likely to come from the SEC and CFTC in the coming months. Holders and traders may want to follow Senate scheduling activity during the lame-duck session, as well as further regulator guidance.

Key details

• Date: January 3, 2027 (confirmed)
• Project: US Congress
• Coins: none specified
• Category: Regulatory Deadline
• Status: confirmed
• Source: https://cryptoticker.io/en/clarity-act-explained/