Senate Blocks CLARITY Act, Cryptocurrency Stocks Slip
The Senate's failure to advance the CLARITY Act on September 15th led to a decline in cryptocurrency stocks, but some argue this is not necessarily bad news.
Coinbase dropped around 4.7%, Strategy fell about 4.6%, Circle slid 5.6%, and Robinhood gave back nearly 3% following the vote, with Bitcoin slipping from near $79,300 to under $77,000 in the hours surrounding the cloture count.
The Digital Asset Market Clarity Act, which aimed to provide regulatory clarity for the cryptocurrency industry, ultimately received only 49 votes and fell short of the required 60. Several lawmakers, including Democrats Kirsten Gillibrand and Mark Warner, voted against the bill due to concerns over its lack of enforceable anti-corruption measures and inadequate protections against decentralized finance (DeFi) loopholes.
Gillibrand specifically cited her objection to the bill's failure to include a ban on presidents and senior officials issuing or profiting from cryptocurrency ventures while in office, which she stated was essential for preventing conflicts of interest. Warner also expressed concerns over the national-security gaps around DeFi, which he believed were not adequately addressed in the bill.
The industry has spent years pushing for regulatory clarity, but some argue that passing a flawed law would be worse than delaying it. The next version of the CLARITY Act will need to address these concerns and provide more comprehensive protections before it can move forward.