The CLARITY Act, intended to establish a comprehensive federal framework for digital assets by drawing clearer jurisdictional lines between the SEC (U.S. securities regulator) and CFTC (U.S. derivatives regulator), has shifted from a likely outcome to a long shot. Polymarket odds of passage in 2026 fell from roughly 82% to 16% after the Senate postponed a crucial cloture vote until September 15. The House passed the bill in July 2025 by a bipartisan 294-134 vote, while the Senate Banking Committee advanced its own version in May 2026 by 15-9. Senate negotiations later became bogged down over ethics provisions concerning conflicts of interest involving public officials, with disagreements over DeFi governance and stablecoin reward mechanisms adding further obstacles. The SEC also canceled a significant meeting scheduled for August 14, 2026, citing an unforeseen scheduling issue, leaving both agencies to operate under their existing authorities. The SEC continues to apply the Howey test when assessing whether tokens are securities, while the CFTC treats certain digital assets as commodities. The September 15 cloture vote is the next key milestone, although passage beyond that point would still leave the ethics and DeFi disputes unresolved, followed by reconciliation with the House version in a conference committee.