U.S. Senate fails to advance Clarity Act amid ethics dispute over Trump crypto holdings
Crypto regulation in the U.S. suffered a setback Tuesday after the Senate failed to advance the Clarity Act in an initial procedural vote. The bill, which would create the first broad federal framework for digital assets, fell short as Democrats withheld support over ethics concerns tied to President Donald Trump's crypto interests.
Highlights
- U.S. Senate fails to advance the Clarity Act, lacking 60 votes, leaving crypto sector regulatory efforts stalled ahead of November elections.
- Democratic objections over ethics, fueled by Trump's crypto holdings linked to World Liberty Financial and his TRUMP memecoin, remain a primary obstacle to progress.
- SEC and CFTC proceed with independent rulemaking on crypto, as SEC Chair Paul Atkins emphasizes sustained investor protection amid legislative delay.
Senate vote stalls regulatory push
The Senate failed to advance the Clarity Act after the measure fell short of the 60 votes needed to proceed, according to The Block. The setback leaves one of the crypto industry's biggest legislative priorities in limbo as the congressional calendar tightens ahead of the November midterm elections.
Sen. Cynthia Lummis, one of the bill's main sponsors, had called the vote a "now or never" moment. The measure has been delayed by disputes over stablecoin rules, illicit-finance safeguards and ethics provisions.
Republicans released revised language before the vote covering "non-decentralized finance protocols" and later added provisions giving state attorneys general more room to enforce ethics rules. Democrats said the changes did not resolve their concerns because enforcement would still depend partly on Justice Department discretion.
Election timing and agency action shape outlook
The failed vote leaves little time for another attempt before lawmakers turn their attention to the midterm elections. Even if the Senate revives and passes the measure, the House would still need to approve it, making final action before November increasingly difficult.
Democratic opposition has focused on Trump's growing crypto interests, including World Liberty Financial and the TRUMP memecoin, which have become a central obstacle to bipartisan support.
Meanwhile, the SEC and CFTC are continuing to advance crypto rules without waiting for Congress. SEC Chair Paul Atkins has backed the Clarity Act while stressing that the agency will keep pursuing measures aimed at investor protection and market innovation.
Our earlier coverage of the Clarity Act examined the run-up to the vote, including the fight over ethics provisions and the SEC's parallel transfer-agent proposal, which could expand tokenized securities infrastructure even without congressional action.
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