The CLARITY Act has an 18% chance of passing. The SEC and CFTC just made that number smaller..

I've been following the SEC and CFTC jurisdictional fight over crypto for long enough to know that what happened on Mar 11 is more interesting than the press release makes it sound. Wrote up why two regulators signing a coordination agreement while Congress debates a law designed to do the same thing is a story worth understanding..

For ten years the central legal question in crypto was simple and unresolved: is this a security or a commodity. The answer determined everything. Which regulator had authority, which rules applied, which enforcement actions were legitimate, which firms needed to register and with whom. The SEC argued that most digital assets were investment contracts under the Howey test and therefore securities. The CFTC argued that Bitcoin and Ethereum were commodities and that its jurisdiction extended further than the SEC acknowledged. Courts got inconsistent answers. Congress debated legislation for years without passing it. The industry operated in the gap

On Mar 11 the SEC and CFTC signed a Memorandum of Understanding establishing a formal coordination framework between the two agencies. Joint information sharing, coordinated enforcement, agreed procedures for handling cases that implicateboth agencies. The document does not resolve the underlying jurisdictional question. What it does is create a working relationship between two agencies that spent the better part of a decade treating crypto as a turf war!1

Here is what goes largely unstated in the coverage of this. The CLARITY Act, which passed the House in July 2025 and has been stalled in the Senate ever since, exists primarily to do through legislation what this MOU is doing through administrative agreement. Draw jurisdictional lines, establish which agency supervises which type of asset, create a framework that theindustry can actually operate under. The banking industry has been blocking that legislation for months on consumer protection grounds. The same week the ABA rejected the White House compromise on CLARITY Act language, the SEC and CFTC quietly formalized coordination without asking Congress for permission

That sequencing matters. A Memorandum of Understanding between two agencies is not a law. It can be revised, withdrawn, or ignored by a future administration. It does not give crypto firms the nstatutory certainty that legislation would. But it does something politically significant it reduces the urgency of passing CLARITY Act by creating the appearance of regulatory coordination without the substance of congressional mandate. If the agencies are already coordinating, the argument for blocking legislation becomes easier to sustain. The question of who benefits from a world where the rules exist as administrative agreements rather than statutes is not complicated. Agencies have discretion over agreements. They do not have discretion over laws

The CLARITY Act's odds of passing in 2026 currently sit at 18% on prediction markets. The MOU did not cause that number. But it did not help it either