TLDR
- The CLARITY Act failed a Senate cloture vote 49-50, well short of the 60 votes needed to begin debate.
- The White House blamed Democrats, saying they put “political games” over American technology and innovation.
- Senator Cynthia Lummis said Republicans added Democratic-requested changes, but every Democrat still voted no.
- Democrats said the ethics language did not do enough to address crypto ventures tied to President Trump and his family.
- Another Senate vote this year is seen as unlikely, and the SEC and CFTC are writing crypto rules under existing laws.
The White House is blaming Senate Democrats after the CLARITY Act failed to pass in the Senate. The crypto market structure bill fell short in a key procedural vote.
Senator Cynthia Lummis, the lead Republican negotiator on the bill, also criticized Democrats. She said her party added the changes Democrats asked for, but every Democrat still voted against it.
Democrats said the final ethics language did not do enough to address crypto ventures tied to President Donald Trump and his family.
How the Senate Vote Played Out
The Senate failed to invoke cloture on the CLARITY Act in a 49-50 vote. The bill needed 60 votes to move forward to debate.
Every Democrat present voted no. A few Republicans also opposed the bill or switched their votes, including Senators Susan Collins, Josh Hawley, Jerry Moran, and Thom Tillis.
The bill would have created the first full market structure framework for the crypto industry. It aimed to clarify oversight between the SEC and the CFTC.
It also included consumer and bankruptcy protections. The bill set rules for crypto exchanges, brokers, and software developers.
White House and Lummis Respond
“The Democrats are to blame for the failure of the Clarity Act because they put political games over doing what’s best for American technology and innovation,” a White House official said in a statement.
The official added that the Trump administration “agreed to the most comprehensive and wide-ranging ethics provision in history.”
The ethics rules would have barred all federal officials from issuing or sponsoring digital assets. Officials would also have had to sell their holdings or place them in a trust.
White House crypto adviser Patrick Witt said Democrats turned Trump’s crypto businesses into a political weapon. Witt also blamed big banks for helping derail the bill.
Lummis said Democrats “were never truly serious.” She said they “presented demands and the second we met them, they made new demands and moved the goal posts.”
She also claimed Democrats hate President Trump more than they like good policy.
On Monday, Lummis said Democrats wanted every non-decentralized trading protocol held to the same Bank Secrecy Act standards as financial institutions. She said that request was included in the bill.
Republicans said the final text had more than 120 changes requested by Democrats. These included ethics language modeled on a bipartisan Tillis-Gallego proposal and a role for state attorneys general.
With the November midterm elections approaching, another Senate vote on the CLARITY Act this year is widely seen as unlikely.
For now, federal regulators including the SEC and the CFTC are writing crypto rules using existing laws.
