CLARITY Act Hits Hurdle in Senate, But Revival Possible Through Reconsideration Motion

The CLARITY Act, a bill aimed at regulating the digital asset market, has hit a hurdle in the Senate. Despite a year-long effort by lobbyists and lawmakers to pass the legislation, it failed to secure the necessary 60 votes on Tuesday. The bill's fate is far from sealed, however, as Republican Senator Thom Tillis switched his vote from 'yes' to 'no' at the last minute, citing procedural grounds.

Tillis's motion to reconsider would allow for a revisit of the cloture vote at any point during the current session. This could potentially revive the bill and pave the way for its passage. However, time is running out as the Senate is scheduled to recess on October 2 before returning after the midterm elections.

Congressman Shri Thanedar, a Democrat who supported CLARITY in its current form, acknowledged that the timeline presents a 'major barrier' to reaching an agreement. He added that a more bipartisan drafting process would lead to a higher likelihood of creating the necessary supermajority coalition for passage.

The divide over the bill is centered on ethics provisions involving President Donald Trump's crypto interests. Democrats want stricter restrictions on public officials profiting from crypto ventures, while Republicans have already made concessions to address these concerns. Chassé, founder of MV Global, believes that rewriting the bill to address these issues could make it more palatable to both parties.

In any case, US crypto regulation is not standing still. The Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) have demonstrated commitment to reducing uncertainty through guidance, rulemaking, no-action relief, and exemptions.