Senate Blocks CLARITY Act, Killing Effort to Regulate Politician-Issued Tokens

The CLARITY Act, which aimed to regulate token and memecoin issuance by politicians, has been effectively killed in the Senate. According to Coinbase CEO Brian Armstrong, a deal on genuine ethics restrictions was put forward by the White House, including requirements for politicians to park their holdings in a blind trust and enforcement powers given to state attorneys general.

However, this deal was rejected by Democrats, who instead voted down the bill entirely. Every Democrat, including Senator Kirsten Gillibrand, voted against the motion to proceed, effectively blocking any further discussion or amendment of the bill.

Armstrong expressed frustration that the vote didn't address the substance of the bill, which had already seen 95% agreement between both sides on issues like market structure and consumer protections. He also noted that voting down the bill essentially erased ethics restrictions, allowing politicians to continue issuing tokens without any oversight.

Despite efforts by Senator Thom Tillis to resurrect the bill, Armstrong's expectation is that it will remain dead until proven otherwise. He believes regulators at the SEC and CFTC may move forward with writing their own rules under their authority, which could ultimately lead to more permissive regulations in the short term.