Nov. 3 midterms will decide SEC oversight and crypto's tax bills

Washington has cleared out for the final pre-election recess, and crypto's next set of rules now runs through a ballot. The midterm election on Nov. 3 will determine how the SEC, CFTC, OCC and Treasury are overseen next year, whether any further crypto legislation passes in the near term, and how much relationship upkeep firms owe whichever party holds the majority, according to CoinDesk's State of Crypto newsletter.

The newsletter's stocktaking as of Friday, Oct. 2 splits on the Senate: a consensus poll on 270towin points to Democrats flipping the House while calling the upper chamber too close, and bettors on Kalshi and Polymarket were less hedged — by 5 p.m. ET that day both markets had Democrats taking the House and the Senate. The two reads diverge on the chamber where the last crypto statute died, and the Clarity Act's 49-50 Senate loss last month is why the near-term agenda now sits with agencies. Our September examination of Senator Cynthia Lummis's account of that defeat located the next crypto statute in committee races and agency dockets.

Much of the industry, the newsletter reports, is watching federal regulators instead. The SEC, CFTC, OCC and Treasury will spend the next year on rulemaking, Congress holds the oversight hearings and must approve the regulators' budgets next year, and the Clarity Act was meant in part to define how those agencies interact with crypto, so its absence leaves them working from their own guidance.

Tax is where Congress is likeliest to legislate. The House Ways and Means Committee passed a crypto tax bill last month on a major bipartisan basis, and Senator Steve Daines introduced a crypto tax bill to the Senate last week; further market-structure legislation is possible but, as the newsletter puts it, unclear. A definition written into the tax code tends to outlast an agency accommodation, which is one reason a committee markup may matter more to issuers than the market-structure bill that failed last month.

The newsletter also records, without forecasting, industry worry that a Democratic Congress would subpoena crypto firms heavily involved in the administration of President Donald Trump, given concerns about his crypto business ties.

The election on Nov. 3, 2026 decides which party holds the gavels for those hearings, and behind that date the near-term crypto file already holds two tax bills on the move and a market-structure bill the newsletter describes as unclear.