Crypto Dealmaking Jumps 44% Despite Clarity Act Uncertainty

Last month, the Senate failed to advance the Clarity Act, a bill designed to establish a regulatory framework for cryptocurrency.

And as CoinDesk reported Sunday (Oct. 4), there is a shrinking window for lawmakers to pass the law this year, leaving regulatory bodies to fill the gap and raising questions about the future of crypto dealmaking.

While it might seem like the downfall of the bill would make buyers less interested in acquiring crypto firms, bankers and investors who spoke to CoinDesk don’t expect last month’s setback to halt crypto M&A.

Rather, they predict a more uneven outcome: deals in areas where regulators have already instituted clearer rules could proceed, while businesses in areas facing unresolved regulatory questions could be a tougher sell.

“The Clarity Act’s setback doesn’t change the trajectory,” said Paul McCaffery, head of digital assets at investment bank KBW, arguing that Congress isn’t alone in setting rules for crypto.

“The SEC and CFTC are already moving proactively to provide the regulatory certainty markets need, and that’s unlocking a wave of M&A across digital assets, traditional financial services, and FinTech alike,” McCaffery said.

In addition to the SEC and CFTC, the Federal Reserve last month introduced two sets of rules implementing the already-enacted GENIUS Act.

“They address permissible stablecoin reserve assets, capital requirements, risk management, custody arrangements and the approval process for supervised banks seeking to issue payment stablecoins, all issues that Clarity was meant to answer,” PYMNTS wrote last week.

And as covered here, the proposals also “bring stablecoins into the familiar bank strategy discussion of the choice of charter and regulator.” A national bank issuing through a subsidiary would work chiefly with the OCC, while an FDIC-supervised state bank would follow that regulator’s process, and a Federal Reserve-supervised state member bank would use the Fed’s.

The CoinDesk report noted that digital asset sector dealmaking reached a record $9.7 billion in disclosed deal value in the first six months of the year, a 44% increase over last year. At the same time, the number of announced acquisitions dropped 8% year over year to 87, with the four biggest deals making up three-quarters of disclosed value.

CoinDesk also noted that not everyone thinks action by regulators can fill the void left by a lack of legislation. Among them is Dmitriy Berenzon, partner at venture firm Archetype.

“Clearer legal framework would absolutely result in more deals, more partnerships permeating across financial services and beyond, and ultimately more economic prosperity for both citizens in the U.S. as well as abroad,” Berenzon said.

“We have already seen how much of a positive impact the GENIUS Act has had on stablecoin adoption, so the more clear and informed the rulemaking, the better,” he added.