Will the CLARITY Act Pass? After 3 January, It's a New Bill

Every bill in Congress carries an expiry date. For the CLARITY Act, that is noon on 3 January 2027, when the 119th Congress ends. It passed the House as H.R. 3633 by 294 votes to 134 in July 2025, then stalled in the Senate, where a procedural vote failed 49–50 on 15 September. Whether the CLARITY Act will pass now depends on both chambers finishing one identical text in the eight weeks that remain. November's election gave Democrats both chambers from January, which changes who writes the next bill. It did nothing to the date on this one.

Kalshi has put a price on that date. On Friday, 6 November, its contract on a market-structure law enacted before New Year's Day was quoted at 3.3 cents bid and 3.6 offered. Each contract pays a dollar. Kalshi titles the event "Will the Clarity Act become law?" and subtitles it "Before Jan 1, 2028", the date on a rung quoted at 22 cents bid and 26 offered. Read fast, it looks like a one-in-four shot for the bill. Yet the bill it names would be alive for only the first two days of 2027, so nearly all of the twenty cents or so above the January price is a bet on a bill with no number and no text.

On Friday afternoon the two prices end up on Soren's desk, because Tao can't make them agree. Crypto taught Tao that a contract runs until its code says stop, so the older world's fixed dates still catch him off guard. Soren measures risk in cut-off times: settlement hours, wire windows, the minute after which a late instruction is refused. Whether this bill deserves to pass doesn't interest him here. What it must still get through, and by what hour, he can recite.

"If the bill's dead, who's paying twenty-three cents for it?" Tao asks.

"That money isn't riding on this bill. It's riding on a law, and a law can arrive on a different bill. This one has the shorter calendar, so we take it first," Soren says.

What happens to the CLARITY Act on 3 January?

"Noon on the third was fixed in 1933, and nobody in this Congress gets a vote on it," Soren says. The Twentieth Amendment ends "the terms of Senators and Representatives at noon on the 3d day of January", and a new Congress assembles at that same hour. Both lines sit in the National Archives' transcript of the later amendments. A Congress lasts two years, and nothing it leaves unfinished passes to the one after it. The Law Library of Congress says a bill that doesn't become law in the Congress that introduced it "is considered 'dead'". To be enacted later, "it would have to be reintroduced with a new number and begin anew its journey through the legislative process".

"What about the House vote? Two hundred and ninety-four yeses just stop counting?" Tao asks.

"They count for H.R. 3633, and that number ends at noon," Soren says. Everything else this Congress did on the subject expires with it: the text the Senate Banking Committee approved in May, and the motion to reconsider that Senator Thom Tillis entered after September's failed vote. That motion, in Bitcoin Magazine's words, "preserves the option of another vote", but only inside this Congress.

The subject has been through this once already. FIT21, the market-structure bill the House passed in May 2024, never got a Senate vote and died with its Congress the following January. What the next Congress produced months later was a new bill under a new number: H.R. 3633.

"So it's an option. Unexercised at noon on the third, it expires worthless," Tao says.

"An option nobody can roll. A new one gets written from scratch, by whoever holds the pen in January."

That is how bills usually die. Nobody votes them down; the Congress holding them runs out of days, and the unfinished work goes with it. In a lame-duck session, that makes floor time scarcer than votes, and floor time is handed out by the leaders who set the schedule.

Can the CLARITY Act still pass this year?

"Say they want it. What's left before noon?" Tao asks.

"More than one vote," Soren says. September's vote was cloture on the motion to proceed, which only lets the Senate begin debating a bill. Ending debate takes three-fifths of the senators chosen and sworn, sixty of the hundred under Senate Rule XXII. That motion drew forty-nine. Tillis's motion to reconsider lets the Senate hold the same vote again. Winning it would only open the debate. The bill's own debate normally needs another sixty to close: the 60-vote floor that a committee majority never guaranteed. So the lame duck would have to find that majority twice, in a chamber that came up eleven votes short in September.

The House would then vote again. Its version differs from the text the Senate has worked from, so whatever the Senate passes goes back across the Capitol. Both chambers must approve identical words before noon on the third. Until they do, there is nothing for the President to sign.

"And the funding fight? Doesn't December always end in one enormous bill?"

"Often enough that people plan for it," Soren says. The stopgap that funds the government runs out on 11 December. Holland & Knight's October alert called it "the most immediate deadline". Its list of likely outcomes runs from full-year appropriations to another continuing resolution or "a hybrid package pairing temporary extensions with selected bipartisan measures".

December is when Congress passes what it must and staples on what it wants. A rider works not because it is popular but because its vehicle has to pass, and it borrows that urgency. Nobody has reported a plan to attach CLARITY's text, though. Even with it attached, the package would need sixty votes to end debate in the Senate.

Tao tallies it: two Senate votes at sixty, a second House vote, a signature, and a shutdown deadline in the way. "All of that in eight weeks," he says.

"Eight weeks, and the last two of them hold Christmas."

Why a new Congress starts from a blank page

If noon arrives first, the 120th Congress would inherit the subject and none of the paperwork. Someone would have to introduce a new bill under a new number. Committees in both chambers would take it up again, and both floors would vote again. The Senate would still end debate at sixty, because its rules carry over from one Congress to the next. No count from the election gives the new majority sixty seats. After that the President signs or vetoes it, and a veto stands unless two-thirds of both chambers override it.

"Couldn't the new majority just pass its own version?" Tao asks.

"Its own version of a bill nobody has seen," Soren says. The day after the election, Eleanor Terrett reported, citing three industry sources, that House Democrats are discussing a market-structure bill of their own. It would start from Representative Maxine Waters' Crypto Investor and Consumer Bill of Rights. Folded in would be the CLARITY amendments Waters offered in the House, which weren't adopted. So would the provisions Senate Democrats had agreed with Republicans before September's vote. The SEC would get a bigger role, and the CFTC a smaller one. Bitcoin Magazine, which carried the report, notes that "no text for the crypto market structure bill has been released". A Democratic bill, it adds, "would still need Trump's signature to become law".

"It isn't this bill with a new number, then. It's another bill about the same thing," Tao says.

That difference is the larger cost of missing noon. In January the committee gavels pass to the new majority, and so does the next bill's first draft. And the outline reported so far tilts supervision back toward the SEC, which Bitcoin Magazine says would reverse the House bill's design.

What the CLARITY Act odds price after the election

"Walk me down the ladder, then. What is each rung betting on?" Tao asks. Each rung is its own contract, paying a dollar if a qualifying law exists before its date, and on Friday afternoon Kalshi's public API quoted the ladder this way.

Only the top two rungs depend on this Congress alone, which makes the January contract a price on this bill or its text riding on another vehicle. Every later rung pays on any qualifying law before its date, so the ladder is cumulative. Inside the 2028 rung sit the January rung's three cents or so, plus whatever becomes law during 2027. Apart from a late signature on this bill, that means a new one. Subtract one from the other and about twenty cents remain.

"It halved, and nothing happened," Tao says. On 4 November, minutes after Kalshi settled its House and Senate control markets for the Democrats, the January contract traded near six cents. By Friday it was at three.

"Two days passed. For a bill with eight weeks left, that is the news," Soren says. Further out, the rungs are thin. The January contract carries roughly ten times the open interest of any later rung; from April on, no rung traded a thousand in a day, and the October spread was seven cents wide. On a book that thin, the last trade tells you who arrived last more than it tells you about the bill.

What a "Clarity Act" market actually pays on

"If a different bill passes next year, does a market called the Clarity Act even pay?" Tao asks.

"Read the rule, not the title," Soren says. Every rung's rule opens with the same sentence. "If a crypto market structure bill has become law before" the date, the market resolves Yes. Three tests follow, joined by an "AND". A qualifying bill sets up "a comprehensive regulatory framework for digital assets, cryptocurrencies, or virtual currencies (but not solely for stablecoins)". It divides authority between federal agencies such as the SEC and the CFTC, and it defines when an asset counts as a security, a commodity or something else.

The CLARITY Act appears only as an example that would count "if passed by both chambers and signed into law". FIT21 is on that list too, though it would need a new number to try again. So is "any omnibus bill that includes comprehensive crypto market structure provisions". Kalshi names the Library of Congress as its settlement source.

The exclusions decide more than the title does. "Appropriations bills that merely fund crypto-related activities" don't count. A December funding bill pays only if it carries the framework itself. "Bills that pass only one chamber of Congress" don't count, which describes this bill today. "Bills that are vetoed and not overridden" don't count either. That clause bites once the new Congress sits, when a Democratic majority needs President Trump's signature or two-thirds of both chambers. It is the wording that decides a payout, one click below a title that promises something narrower.

The dates carry fine print of their own. The January contract closes on New Year's Day at ten in the morning, Washington time. That is two days before the bill dies. The February contract that would catch those two days is listed but inactive, with no quotes and nothing open. A law dated the first or second of January isn't far-fetched, either. The American Taxpayer Relief Act cleared Congress on New Year's Day 2013 and was signed the next day. A repeat would pay nothing on the January rung and count first on April's.

A signature can come later still. Article I gives the President ten days, Sundays excepted, to sign a bill or return it. With that Congress gone, a bill left unsigned simply fails. Signed, it becomes law. In January 2021, sixty bills passed by the previous Congress became law after the new one had convened. The last nineteen came on the 13th.

"The bill dies on the third, and the law can still arrive on the thirteenth," Tao says.

"And the January contract closed on the first. Three dates, and the contract only reads the earliest."

Who draws the line if no bill passes?

"And if nothing passes at all? What changes for someone who just holds crypto?" Tao asks.

"On the fourth, nothing you'd see on a chart," Soren says. Without a statute, the agencies keep drawing the line between the SEC and the CFTC, working from laws written for stocks and futures. The CFTC's October notice on margined retail trades is one example. It is a preliminary reading that the agency would have to turn into a rule before it bound anyone, and a later commission could drop it without a vote in Congress. A statute would fix the line in a text that only another statute can change. That durability is what the ladder puts a price on.

At noon on 3 January, either this bill has cleared both chambers or every rung still trading on Kalshi's ladder becomes a price on a bill no one has filed.

Give one simulated position three exits, two the ticket can hold and one it can't. Go long a coin or tokenized stock you'd expect a market-structure law to lift (prediction markets aren't on the ticket), with a Stop Loss below the entry and a Take Profit above it. The third exit is noon on 3 January, the one certain to arrive: on the 4th, look at the position and decide whether the reason you bought it still exists.

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