Senate Blocks Clarity Act, Crypto Regulation Bill Fails to Clear Key Vote

The U.S. Senate failed to advance the Clarity Act, a bill aimed at establishing a federal framework for crypto markets, after a key vote on Tuesday.

The motion to proceed, which requires 60 votes, was rejected by a 49-50 margin, with all Democrats present voting against it alongside some Republican Senators. The Clarity Act would have essentially legalized most crypto activity in the United States and clarified the roles of regulatory agencies such as the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC).

Congress has been working on the bill for months, with lawmakers negotiating over stablecoin rewards, safeguards against illicit finance, and ethics restrictions. The updated text released before the vote incorporated 126 substantive changes requested by Democrats.

However, Democrats were not satisfied, sending a counteroffer seeking additional restrictions on large crypto holdings and paid crypto promotions. Senate Banking Committee spokesperson Jeff Naft said that Democrats had 'moved the goalposts again' in their demands.