Patrick McHenry Sees a Lame-Duck Window for CLARITY

Patrick McHenry argued that the Senate should have brought the CLARITY Act to the floor earlier, giving lawmakers time to work through its provisions before election-year politics crowded out the effort. The bill passed the House with nearly 300 votes but has not cleared the Senate. McHenry sees the lame-duck session as a chance to finish the job, rather than abandon the broader legislative effort.

Asked what might bring Democrats back to the bill, McHenry answered, “The election.” The discussion identified late-cycle politics and ethics concerns as obstacles, while noting that Democratic participation reflects broader bipartisan support for CLARITY’s framework. The policy, participants suggested, is largely “baked,” and a post-midterm lame duck could provide another opportunity to complete it; that remains an opportunity, not a guarantee of passage.

McHenry said Congress is pursuing the full CLARITY Act rather than breaking off provisions to secure narrower wins. House work began with a crypto working group nearly seven years ago, and the Senate has spent more than two years on its process. If the measure fails in the lame duck, he warned, future legislation may proceed in smaller pieces and serious crypto legislation could become harder to pass in the next Congress.

The discussion also turned to AI agents that can trade without users approving every order. Robinhood is developing such agents, and its Loop feature would enable round-the-clock trading; Renato said more than 150,000 customers already have agentic accounts. Robinhood says it does not control, supervise, monitor, recommend, or audit its agents, leaving responsibility for trades with users. Coinbase’s in-app agent takes a different approach: it is a registered investment adviser and commodity trading adviser.

McHenry said agentic trading needs durable law as well as input from the courts. He suggested that an agent could face liability similar to a broker-dealer while individuals remain responsible for core decisions, but framed this as a question needing clearer rules. Regulators can offer interim clarity, he said, while congressional legislation would better define the trade-offs. The CFTC is holding its first forum on agentic finance on October 28.

Regulatory guidance and jurisdiction remain unsettled in other areas too. The UK FCA is accepting authorization applications from crypto firms, and the SEC issued an FAQ addressing federal securities laws and crypto assets, including buybacks. Renato cautioned that the FAQ is staff guidance, not a Commission vote or force of law, and should be treated as a map rather than a shield. McHenry said the CFTC has authority under commodities laws to take the actions it is taking, though Congress could limit that authority.

On prediction markets, McHenry distinguished contracts on individual basketball shots or free throws, which he said he would not put on a commodities exchange, from contracts tied to major events with economic consequences. Litigation is ongoing, including a case that could reach the Supreme Court. Hester Peirce’s view, as described in the discussion, was that people should be free to make decisions, take risks, fail, and build things that benefit others; she was characterized as principled, not uniformly pro-crypto. The discussion noted that the SEC has two commissioners and the CFTC one, and raised concern that small commissions and changed quorum rules could weaken the quality and durability of policy.