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Bernstein is sounding the alarm. The CLARITY Act&#x27;s odds are fading. That&#x27;s a problem. A real one.
The research firm warns that a stalled bill pushes the <a href="https://www.thecoinzone.com/news/sec-shifts-from-crypto-crackdown-to-framework/" data-wpil-monitor-id="2789">SEC and CFTC toward</a> unilateral rulemaking. That path moves faster. It&#x27;s more restrictive. DeFi protocols, self-custody users, and token issuers take the hardest hits. No congressional framework means no negotiated outcomes. Agencies write the rules alone.
The <a href="https://www.thecoinzone.com/regulation/clarity-act-stablecoins-eth-defi-explained/" data-wpil-monitor-id="2787">CLARITY Act</a>, formally the Digital Asset Market Clarity Act, targets one of crypto&#x27;s oldest headaches: SEC vs. CFTC jurisdiction. Nobody agrees on who owns what. The bill would fix that. It establishes token classification standards. It defines safe harbors for DeFi. It draws a hard statutory line between the two agencies. For <a href="https://www.thecoinzone.com/blockchain/best-ethereum-alternatives/" data-wpil-monitor-id="2791">Ethereum builders and Layer</a> 2 ecosystems like Base, that line matters. ETH&#x27;s security-versus-commodity status is still unresolved. A legislative answer carries real operational weight.
The odds aren&#x27;t good.
Joshua Riezman, Chief Legal and Strategy Officer at GSR, spoke at Consensus Miami in May 2026. He told <a href="https://theblock.co" target="_blank" rel="noopener">The Block</a> the bill has &quot;less than an even chance of reaching the president&#x27;s desk in the current congressional session.&quot; Galaxy Research put passage odds at roughly 50% in late June 2026. They revised that downward by late July. Current estimate: 30-50%. Senate calendar constraints. Unresolved ethics provisions. Both working against it.
Not everyone&#x27;s pessimistic. Former Barclays CEO Bob Diamond reportedly told CNBC he sees 50-75% passage odds. He reportedly named Circle and Hyperliquid as the biggest beneficiaries. Those claims come from social signal coverage tracked by LunarCrush. No full transcript confirmation yet. Treat them as preliminary.
Circle and Hyperliquid aren&#x27;t just names on a list. <a href="https://www.thecoinzone.com/news/circle-mints-125b-usdc-solana-ethereum-single-day/" data-wpil-monitor-id="2790">Circle announced expanded USDC</a> support on Hyperliquid on May 14, 2026. Both companies&#x27; near-term growth is now tied to this bill&#x27;s outcome. A statutory framework gives them clearer ground. Agency-driven rulemaking doesn&#x27;t.
That&#x27;s Bernstein&#x27;s exact concern. Congress stalls. The SEC and CFTC fill the vacuum. They use enforcement actions, interpretive guidance, or formal rulemaking. It&#x27;s not legislation. The industry gets far less input. Historically, it lands harder on DeFi participants and self-custody users. Bernstein&#x27;s note flags all three sectors directly. Token classification too. All exposed. All vulnerable if the bill dies.
The <a href="https://www.thecoinzone.com/news/major-crypto-bill-senate-committee-april/" data-wpil-monitor-id="2788">bill did clear</a> the Senate Banking Committee markup on May 14, 2026. That&#x27;s the last piece of real momentum. Ethics and governance provisions have complicated everything since. The window in the current congressional session is closing fast.
Two possible outcomes. Rules written by Congress. Rules written by agencies. Bernstein&#x27;s warning is clear: the agency path is now more likely.
For builders and investors in Ethereum&#x27;s DeFi and Layer 2 ecosystem, the next few months decide it.

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CLARITY Act Odds Drop: Bernstein Warns of Brutal Fallout

Bernstein warns fading CLARITY Act odds could hand SEC and CFTC unilateral crypto rulemaking power, hitting DeFi, self-custody, and token issuers hardest.