The Democratic Party claims to have control of the U.S. Senate.
A shift in Senate control could alter the path forward for the CLARITY Act, reshape committee leadership, and subject Trump-related crypto businesses to closer scrutiny.
According to the Associated Press, the Democratic Party has won control of the U.S. Senate.
After Democratic Senator Josh Turek won the Iowa State Senate election, the Democrats, along with their allied independent, increased their seat count to 51, securing a majority.
This outcome has reshaped the prospects of the stalled CLARITY Act and determined which lawmakers will lead the various committees responsible for regulating the industry.
Democratic control of the Senate could lead to increased congressional scrutiny of Trump-linked cryptocurrency businesses and regulatory decisions. Control of the Senate may also impact whether future presidential nominees for regulatory positions are confirmed.
“It’s still too early to accurately determine what this means for the crypto industry, but one thing is clear: no bill can pass without bipartisan support,” said Jerome de Tychey, Chairman of Ethereum France and co-founder of EthCC, to Cointelegraph.
The CLARITY Act failed a procedural vote in the Senate in September by a vote of 49 to 50, and if it does not pass by January, the next Congress will have to start over. As a result, the industry will have to return to the negotiating table and essentially re-advocate for blockchain from scratch.
De Teixeira said that some Democratic demands could help strengthen the industry's regulatory framework.
Conflict of interest rules and client protection obligations are things a mature industry should welcome. In Europe, we have already been operating alongside these rules under the MiCA framework,” he said, referring to the European Union’s Markets in Crypto-Assets regulation.
However, he warned that crypto policy should not become entrenched along partisan lines.
The biggest risk facing the U.S. crypto industry is that it becomes a partisan issue; this could set the U.S. back by years.
Fred Hsu, co-founder and CEO of D3 and a core contributor to Doma Protocol, also stated that lasting regulation requires bipartisan support.
“The midterm elections serve as a reminder to the industry that it should not rely on a single party to get this done—now is the time to clearly communicate our position to lawmakers from both parties,” Xu said in comments provided ahead of the election.
Related reading: As the midterm elections unfold, a 1inch lawyer believes U.S. cryptocurrency regulation will be led by various agencies.