Crypto mergers and acquisitions are at an all-time high, yet the recent Senate setback for the Clarity Act prompts dealmakers to reconsider the impact of ongoing regulatory uncertainty.
The cryptocurrency sector has long awaited a comprehensive regulatory framework from Congress that would clarify which digital assets fall under the jurisdiction of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). This clarity was expected to provide much-needed certainty for businesses and investors, reducing reliance on regulators whose policies may fluctuate with different administrations.
However, these aspirations were challenged on September 15, when the Clarity Act failed to pass a procedural vote in the Senate, garnering 49 votes in favor and 50 against, falling short of the 60 needed for advancement. Negotiations had stalled due to concerns over ethics regulations for senior officials involved in crypto businesses, including those related to President Donald Trump, alongside issues of investor protection and illicit finance.
With the midterm elections approaching and limited legislative time left, the Act's defeat significantly diminishes its chances of being passed this year, leaving regulators to fill the void.
Impact on Dealmaking?
At first glance, one might assume that the failure of the Clarity Act would hinder crypto dealmaking. After all, the prevailing regulatory uncertainty could deter potential buyers, especially traditional financial institutions, from pursuing acquisitions in the U.S., particularly when the regulatory status of their targets is unclear.
Yet, bankers and investors interviewed by CoinDesk do not foresee the Clarity Act's setback significantly stalling crypto mergers and acquisitions. Instead, they anticipate a more nuanced effect: transactions in sectors where regulators have already established clearer guidelines may continue, while businesses facing unresolved regulatory issues could become more challenging to acquire.
Paul McCaffery, head of digital assets at investment bank KBW, stated, “The Clarity Act’s setback doesn’t change the trajectory.” He emphasized that Congress is not the sole authority on this matter, noting that “the SEC and CFTC are already proactively moving to provide the regulatory clarity that markets need, unlocking a wave of M&A across digital assets, traditional financial services, and fintech.”
In fact, just two days following the Senate vote, the SEC approved a temporary "Innovation Exemption", facilitating limited trading of tokenized U.S. stocks on specific blockchain platforms. Furthermore, on October 1, the agency proposed new rules to clarify how investment firms should manage and safeguard customer crypto assets. Concurrently, the CFTC has been easing some regulatory hurdles, such as providing relief to certain software providers and updating guidance related to tokenized investments and blockchain recordkeeping.
“We’re at the beginning of a tokenization and digital payments supercycle that is developing internationally first, but it will inevitably return to the U.S., and those who wait for Congress will miss out,” he added. “It has taken a long time to reach this point, but the convergence is genuine, and pursuing acquisitions is a more efficient strategy than building from scratch.”
Todd White, a partner at advisory firm Architect Partners, also anticipates that regulatory actions outside of Congress will sustain momentum, particularly in the tokenization space. He remarked, “The SEC’s decisive move following the legislative failure seems ready to drive activity around tokenization, both for commercial viability and strategic transactions. We’ve already observed significant shifts toward more liquid assets and institutional finance. The new ‘Innovation Exemption’ should enhance that momentum.”
As for the data, dealmaking within the digital asset industry hit a record $9.7 billion in disclosed deal value in the first half of 2026, representing a 44% increase from the previous year, according to CryptoRank Research. However, it is important to note that the number of announced acquisitions declined by 8% year-over-year to 87, with the four largest deals accounting for 76% of the total disclosed value, indicating a market driven by a few large transactions rather than widespread activity.
For instance, Payward, the parent company of Kraken, exemplifies the factors propelling some of these deals. The firm has agreed to acquire payments company Reap for $600 million and derivatives platform Bitnomial for up to $550 million, while Nasdaq has committed to investing $100 million in Payward alongside an expanded commercial partnership.
These transactions underscore the demand for licenses, technology, and distribution that could maintain activity despite the ongoing stagnation of comprehensive U.S. crypto legislation.
The Importance of Clarity
Not everyone believes that regulatory actions from the SEC and CFTC can adequately replace the need for legislation. Dmitriy Berenzon, a partner at venture firm Archetype, asserted, “A clearer legal framework would undoubtedly lead to more deals and partnerships across financial services and beyond, resulting in greater economic prosperity for both U.S. citizens and those abroad.” He further noted the positive impact of the GENIUS Act on stablecoin adoption, emphasizing that clearer and more informed rulemaking is beneficial.
Jake Brukhman, founder and CEO of venture capital firm CoinFund, took a broader perspective on the implications of the Clarity Act's failure, suggesting that it does not necessarily worsen the regulatory environment but rather means that the anticipated improvements for buyers have not materialized. He stated, “The failure of the Clarity Act does not create new hurdles; it merely maintains the existing regulatory uncertainty facing the sector,” highlighting that the effects will vary across different areas.
“It hinders a significant regulatory de-risking that could have accelerated dealmaking, particularly for token-centric companies and pre-token financing. Businesses operating under clearer existing regulations, such as equity-based infrastructure and payments, should be less impacted,” Brukhman explained.
Will Nuelle, a general partner at Galaxy Ventures, echoed this sentiment. He believes that a more transparent legal framework for digital assets would lead to increased activity in the sector, though he noted that the effects would be uneven. “Deal activity has already become concentrated in categories that the SEC and CFTC have de-risked through Project Crypto and joint guidance, such as exchange infrastructure, spot trading, and tokenized collateral.”
The crucial question now is whether buyers will continue to seek out strategic opportunities while Washington works towards a sustainable regulatory framework, or if prolonged uncertainty will lead them to hesitate. “In general, having regulatory frameworks is advantageous, especially for institutional adoption, which can serve as a supportive tailwind for entrepreneurs in the space and is certainly beneficial for M&A,” Nuelle concluded.