Paradigm senior advisor Justin Slaughter said on Unchained’s livestream Thursday that the CLARITY Act won’t pass in the lame-duck session, and that House Financial Services staff are reportedly writing a market structure bill of their own.

“So to break some news, CLARITY does look dead. I don’t think it passes in the lame duck,” he said. “Dems want a chance to rewrite things.”

Democrats won majorities in both chambers on Tuesday, with Sen. Elizabeth Warren poised to chair the Senate Banking Committee, as Unchained reported. The bill had stalled in the Senate in September.

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Four Pieces of a Democratic Draft

Slaughter said it was unclear what the bill House Financial Services Committee staff are reportedly writing would contain, but “the best information I have is it involves four things.”

The first is “much stricter requirements on ethics of crypto ownership and involvement in crypto companies by government officials,” which he tied to President Donald Trump and his family’s crypto dealings. The second is “stricter rules on DeFi, much stricter than the BRCA,” a reference to the Blockchain Regulatory Certainty Act, which would keep developers who never control user funds out of money-transmitter rules.

Third, he expected more of the consumer protections pushed by Rep. Maxine Waters, the likely incoming committee chair, such as “payouts within 24 hours” and “very strong independent audits.” Fourth, and “perhaps most controversially, more of the industry will shift its jurisdiction of the CFTC to the SEC.”

“Now, that’s a rough draft,” Slaughter said. Democrats who follow crypto closely, he said, concede that “80% of CLARITY’s fine.”

“We’re fighting over 20%. The problem for the industry is parts of that 20% are what they really care about,” he said, and DeFi in particular “needs to be watching this very closely” as Democrats write the bill.

Slaughter’s outline lines up in part with what journalist Eleanor Terrett reported on Nov. 4: House Democrats are weighing a broader bill built on Waters’ Crypto Investor and Consumer Bill of Rights, one that could hand the SEC more of the industry at the CFTC’s expense and would likely add ethics curbs aimed at Trump and other officials, according to three industry sources who spoke with Democratic staffers. Slaughter’s DeFi point goes beyond her post, which did not address it.

Manatt partner Mike Katz said on the livestream that Waters is “the chair presumptive” but “may be challenged, maybe by Sean Casten.” Roll Call reported in October that Casten, a Democratic congressman, had entered the race to lead the committee’s Democrats.

Any House bill would then go to a Senate where, Katz said, the open question is whether “the vengeance side” of the party or “the pragmatists, the centrists” prevail.

Agencies and the GENIUS Act

Slaughter said he does not expect the SEC’s and CFTC’s crypto rules to move. “I don’t think the rules change over the next two years,” he said. Slaughter said his understanding is that SEC Chair Paul Atkins knows not to try “a whole suite of 30 or 40 rules, but do a few rules.” He also saw “some small risk” of “a rider put on an appropriations bill that stops work on some rulemakings.”

On the GENIUS Act stablecoin law, Katz said “the only agency that has finalized the rules is the OCC.” The OCC’s final rule, issued Oct. 21, takes effect Jan. 18, 2027, the same day the law does, and the FDIC, Federal Reserve and NCUA have only proposed rules so far, law firm Mayer Brown wrote on Nov. 4.

Katz said banks are “doing everything in their power to sabotage Genius” and that the industry should not wait for 2028: “we can’t just sit around and wait it out.”

Related Listen: What the 2026 Midterm Elections Mean for Crypto Regulation and the Clarity Act