Artificial intelligence (AI) is not the only technology facing a rockier road in Washington after the midterm elections. With Democrats winning control of both chambers of Congress, the crypto industry faces greater scrutiny and a narrowing opportunity to secure the federal market rules it has sought, even as financial pressures weaken investor appetite for digital assets.

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The immediate legislative issue is the Clarity Act, which would define how federal regulators oversee different crypto assets and trading activities. Unless lawmakers revive the measure during the lame duck session, its supporters will have to begin a new legislative effort when the Democratic Congress takes office in January, Decrypt reported.

A return to the same legislative bargain appears unlikely under the incoming majority. That leaves exchanges, token issuers and other digital asset businesses facing continued uncertainty over the legal framework governing their operations.

The bill was already stalled before voters went to the polls. In September, senators voted 49-50 against advancing it, well short of the 60 votes needed to clear a procedural hurdle. The vote did not reject the legislation on final passage, but it prevented the measure from reaching full debate.

Negotiations had become entangled in disputes over restrictions on government officials’ crypto business interests and the treatment of rewards paid on stablecoins. President Donald Trump’s personal and family crypto ventures were a particular source of opposition among Democratic lawmakers.

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