Galaxy Digital has warned that Democratic control of the US House and Senate could slow efforts to pass new cryptocurrency laws. The firm raised doubts about the CLARITY Act after voters gave Democrats control of both chambers in the November 3 midterm elections.
In its November 6 research note, Galaxy said the change could also bring closer congressional scrutiny of digital asset companies. The outlook comes after the Senate failed to advance a major crypto bill in September.
Galaxy said it does not expect substantial movement on major cryptocurrency legislation in the next Congress. Its research linked that forecast to the election result and the likely change in leadership of committees responsible for financial policy.
The firm wrote that it does "not expect substantial movement in Congress on key digital assets legislation. " The statement concerned prospects for new laws, rather than an announcement that Congress had formally withdrawn the CLARITY Act.
The bill had already suffered a setback on September 15. The Senate voted 49-50 against moving forward with debate, below the 60 votes needed. The legislation would establish rules for digital assets and clarify responsibilities shared by the Securities and Exchange Commission and the Commodity Futures Trading Commission.
All Democratic senators who participated voted against proceeding, along with four Republicans. The vote blocked debate but did not amount to a final decision on the bill.
Galaxy had previously said the chances of progress were low even before the election. In September, it wrote that "the odds are relatively low" that the CLARITY Act would advance in the next Congress if Democrats gained control of either chamber.
Democrats' election gains could place Senator Elizabeth Warren in charge of the Senate Banking Committee. Representative Maxine Waters could also return as chair of the House Financial Services Committee. Galaxy identified both panels as central to cryptocurrency legislation and oversight.
Neither leadership appointment was final when Galaxy published its report. However, Democratic control of the chambers gives the party authority to choose committee chairs and set hearing agendas in the next Congress.
Warren has challenged crypto industry practices and raised concerns about financial conflicts involving President Donald Trump's digital asset interests. Waters has also questioned investor safeguards in Republican-backed crypto legislation. In June 2025, House Financial Services Democrats requested an additional hearing to examine the CLARITY Act and possible conflicts of interest.
Galaxy said new committee leadership could increase investigations into crypto companies and Trump-linked ventures. That remains a forecast, not a confirmed investigation or an announced enforcement action.
The election does not end existing federal crypto regulation. Galaxy noted that the SEC, CFTC and banking regulators have continued developing digital asset rules under powers already granted by Congress.
However, agency actions cannot replace every change that requires a new law. Galaxy's earlier assessment said Congress still has a separate role in setting lasting rules for digital asset markets.
The firm also noted that some Democrats have supported cryptocurrency legislation, including Senator Kirsten Gillibrand. Her party's larger Senate majority could give those lawmakers more influence in future negotiations, although Galaxy did not predict a new agreement.
For now, the September Senate vote remains the latest major procedural setback for the CLARITY Act. The new Congress will determine whether lawmakers revisit the proposal, pursue a different framework or focus on oversight hearings.
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