Democrats Win Senate With 51 Seats as CLARITY Act Remains Stalled
Democrats flipped six Republican-held seats to win the Senate, per the AP. Sherrod Brown beat $63 million in crypto spending, Elizabeth Warren is positioned to lead Banking, and the stalled CLARITY Act must pass by January or start over.
The crypto market structure bill now faces a Senate run by the other party. Democrats won control of the chamber on Tuesday, November 3, according to the Associated Press, after flipping Republican-held seats in Texas, Ohio, North Carolina, South Carolina, Kansas and Iowa.
The majority was secured when Democrat Josh Turek won Iowa, bringing Democrats and the independents who caucus with them to 51 seats. Not every count is settled, though. Some reporting still describes Senate control as projected, with more states possibly factoring in, and Democrats are also projected to take the House, a result that is not yet final.
Brown survives $63 million of opposition
For the industry, the Ohio race carries the most weight. The crypto industry spent $63 million trying to defeat former Senator Sherrod Brown, and the effort failed: he is expected to return to the Senate. Elsewhere, James Talarico won Texas with 59% at last count, Roy Cooper took North Carolina with nearly 59%, and Adam Hamilton and Annie Andrews won Kansas and South Carolina respectively.
We flagged this possibility beforehand, when Kalshi priced a Democratic House at roughly 94% and the open question was whether crypto policy would shift from legislation to investigations.
The CLARITY Act clock
The CLARITY Act is awaiting floor action after a failed procedural vote, and Elizabeth Warren is positioned to take over the Banking Committee. Jerome de Tychey, president of Ethereum France and co-founder of EthCC, laid out the timetable: the bill failed its Senate procedural vote 49 to 50 in September, and if it is not passed by January, the next Congress starts again from scratch. The weeks between now and January are therefore the bill's last window under the current Senate, rather like a game clock running down before the next game is played under rules written by different referees.
"It's too early to say exactly what this means for crypto, but one thing is clear: nothing will pass without cross-partisan support"
Jerome de Tychey
The consequences reach beyond one bill. Democratic control could bring more congressional scrutiny of Trump-linked crypto businesses and of regulators' decisions, and could affect the confirmation of future nominees to regulatory posts.
Not all bad for the industry
The picture is not uniformly negative. De Tychey argues that some Democratic demands, such as conflict-of-interest rules and customer protection obligations, could strengthen the industry's regulatory framework and are things a mature industry should welcome. The sector also still has many friends on Capitol Hill, even if it can expect a chillier reception from Democratic committee chairs.
Fred Hsu framed the lesson for lobbyists directly:
"The midterms are a good reminder that the industry can't rely on one party to deliver them, and should be making its case to lawmakers on both sides now"
Fred Hsu
De Tychey's warning is the sharper one: "The biggest risk for crypto in America is for it to become entrenched as a partisan issue; that could set the US back several years." Read alongside the result in Ohio, where $63 million did not move the outcome, the message is that bipartisan support, not spending, is what the CLARITY Act needs if it is to pass before the calendar resets.
