Senate Rejects Clarity Bill, Cryptocurrency Market Reels

The U.S. Senate has dealt a significant blow to comprehensive market-structure regulation for the cryptocurrency industry by rejecting the Clarity bill.

The bill, which aimed to establish a regulatory framework and divide supervisory authority between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), fell short of the 60 votes needed to bring it forward in a procedural vote on September 15. With 50 senators voting in favor and 49 against, the bill was stalled on Capitol Hill despite months of bipartisan talks.

Republican leaders had offered an amendment adding ethics rules to limit profits from cryptocurrency businesses by public officials, but this did not sway opposition from Democrats. Senator Ruben Gallego criticized Republicans ahead of the vote, saying that they had put President Donald Trump's profit issue ahead of introducing regulation.

The rejection of the Clarity bill has sent shockwaves through the markets, with Bitcoin falling 3 percent and shares of Coinbase and Circle plummeting by 8 percent and 10 percent respectively.