Original Author: Cleve Mesidor (Executive Director, Washington DC Blockchain Foundation)
Original Compilation: AididiaoJP, Foresight News
In this sports season filled with Cinderella stories, the crypto industry is also looking forward to its own moment in the spotlight – the CLARITY Act currently advancing in the U.S. Senate could be that crucial 'comeback'. However, with two quarters left before the final whistle, Republicans likely need to reach a compromise with the White House on ethical issues while also persuading a few Republican senators still on the fence to secure the 60 votes for passage.
It's only halftime; there are still six months in the year, anything is possible. Legislative victories are essentially no different from scoring points on the field—they require the precise alignment of multiple factors. Sometimes, burning a little sage for good luck doesn't hurt—just look at the New York Knicks this year.
The second half of this policy year will be a critical period for intensive bipartisan negotiations in both the Senate and the House. Zooming out, market structure legislation is just one piece of a larger script aimed at building a comprehensive policy and regulatory framework for Web3 and DeFi.
The congressional calendar is already packed, with only 40+ legislative working days remaining—even factoring in the lame-duck session and midterm elections, time is extremely tight for all sides to strategize and adjust the score.
A Crowded Policy Arena
Beyond the prospects for the CLARITY Act, can the multiple crypto tax proposals spun off from the new PARITY Act hitch a ride on a larger legislative 'vehicle' and become law this year?
Can the core language of the Blockchain Regulatory Certainty Act pull off a 'Hail Mary' pass to formally enshrine developer protections into law?
Furthermore, the full-court press on the GENUIS rulemaking continues, with key provisions still awaiting finalization.
For crypto enthusiasts, this is like sports fans following an entire season: rich in storylines, full of suspense, exciting yet nerve-wracking.
CFTC Lacks Its Starting Lineup
The fact that a financial regulator is missing four commissioners is a deep concern for the industry. For crypto, this directly impacts expectations for action from Washington—uncertainty remains over whether new commissioners can be nominated and confirmed this year.
More pressingly, who will win the jurisdictional battle over prediction markets? The individual states, the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC)? Or will it ultimately be decided by the Supreme Court?
Of course, this is not a suggestion to place a bet.
Crypto Champions Set to Retire
Regardless of the final policy outcomes, the remainder of this year is likely to be bittersweet. Two heavyweight 'crypto champions' are set to hang up their federal government jerseys, and their departure will have profound short and long-term impacts: SEC Commissioner Hester M. Peirce and U.S. Senator Cynthia Lummis.
Peirce, a two-term commissioner and leader of the SEC's crypto task force, has been a core architect of cross-regulatory coordination efforts. Lummis, as Chair of the Senate Banking Committee's Subcommittee on Digital Assets, has been a key negotiator for bipartisan compromise and a staunch advocate for the BRCA.
Second-Half Outlook: Views from Industry Leaders
I interviewed several senior industry leaders to get their read on the current crypto policy deliberations. Here are their perspectives on CLARITY, taxation, and prediction markets:
Sara K. Weed (Partner, Gibson, Dunn & Crutcher LLP):
"It's undeniable we are steadily moving in the right direction. However, constrained by the shortage of legislative days and election pressures, the likelihood of CLARITY passing in this Congress is low. Consequently, agencies like the SEC and CFTC will be forced to play a more active role in providing much-needed certainty for the industry. The question, of course, is how far they can go within their existing authority."
Sulolit 'Raj' Mukherjee (CEO, Bodin Advisory):
"If history is any guide, meaningful crypto tax legislation is most likely to pass not as a standalone bill, but embedded within broader tax, budget, or end-of-year omnibus legislation. The current array of proposals are relatively targeted, enjoy bipartisan consensus, and aim to address specific issues like de minimis exemptions, tax treatment of staking, wash sale rules, and information reporting requirements. Such provisions are easier to advance when attached to must-pass larger bills. Ultimately, enactment hinges on bandwidth in Congress, scoring, and whether lawmakers view crypto tax rules as technical fixes to improve compliance rather than part of a larger digital asset policy debate. The chance for at least one or two measures to become law this year is real, but likely via a vehicle, not a standalone crypto tax bill."
Rashan Colbert (U.S. Policy Director, Crypto Council for Innovation):
"I won't predict how the courts will resolve the jurisdictional dispute, but the overarching direction is becoming clear: as the prediction market category matures, the CFTC is committed to building a more durable regulatory framework for it. The recent NPRM is another step towards providing more transparency and legal certainty for market participants—in a space seeing significant growth in user base and trading volume.
The central question is: should prediction markets primarily be viewed as financial market infrastructure or broadly categorized as gambling? I believe these markets have the potential to be sophisticated tools for expressing views, hedging risk, and streamlining access to derivatives on a wide range of events and assets. An overly broad gambling framework risks stifling that potential before the markets have a chance to develop into positive-sum financial infrastructure."
The second half of crypto policy has begun. The time window is narrow, but the window of opportunity remains open. The industry needs sustained bipartisan communication and pragmatic push to achieve substantive results by 2026.
