Senate Blocks CLARITY Act, Triggers $300M Crypto Market Selloff

The US Senate's failure to advance the CLARITY Act has triggered an immediate selloff across crypto markets, with roughly $300 million in leveraged long positions reportedly liquidated within about 20 minutes of the vote. The Senate rejected cloture on the motion to proceed with the Digital Asset Market CLARITY Act by a narrow margin of 49-50 votes, leaving the legislation well short of the 60 votes required to advance.

Bitcoin fell below $75,000 following the vote, while Ethereum, XRP and other major cryptocurrencies also came under selling pressure. Reports tracking derivatives markets estimated that approximately $300 million of leveraged long positions were wiped out within roughly 20 minutes as falling prices triggered forced liquidations.

The defeat prompted an angry response from Republican Sen. Cynthia Lummis, one of the legislation's leading architects, who accused Democrats of derailing more than a year of negotiations. 'Democrats chose politics over the American people, again,' Lummis said following the vote, while arguing that Republicans had repeatedly accommodated Democratic demands during negotiations.

The CLARITY Act seeks to establish rules governing digital commodities and clarify the respective roles of the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC).