The US Senate on Tuesday failed to invoke cloture on the Digital Asset Market Clarity (CLARITY) Act, the crypto industry’s flagship regulatory bill, falling short of the 60 votes needed to advance it to formal debate. The final tally was 49 in favor and 50 against, according to Cointelegraph, leaving the sector without a federal framework and effectively ending the bill’s chances for 2026.
Bitcoin slid from a session high near $77,200 to a low around $75,600 as the no votes mounted, before paring losses to trade near $75,800, down about 3.2% on the day, Decrypt reported. More than $300 million in crypto long positions were liquidated within 20 minutes of the vote’s failure, per Coinpedia.
Also read: UK FCA Gets 123 Tokenization Responses, Plans Joint Roadmap With Bank of England
Key facts
- The cloture motion on H.R. 3633 failed 49-50, well short of the 60 votes needed to move the bill to formal debate.
- The overall crypto market cap fell to $2.70 trillion, down 2.9% over 24 hours, with Bitcoin breaking below $75,000 for the first time since August 20.
- Coinpedia reported that 18 state attorneys general wrote Monday arguing the bill would weaken states’ ability to police crypto fraud.
- Prediction market odds of CLARITY passing this year dropped to 5%, an all-time low, according to Coinpedia.
- Sen. Cynthia Lummis (R-Wyo.), the lead GOP negotiator, said ahead of the vote that Republicans had already delivered more than 120 of the changes Democrats had requested over the past year.
How the vote fell apart
Tuesday’s procedural vote followed months of stalled talks. Staff for Senator Tim Scott abruptly ended final negotiations over ethics provisions in Senator Thom Tillis’s office just before the vote, Coinpedia reported. What followed was a wave of no votes from senators on both sides. Democrats including Gillibrand, Warner, Booker, Warnock, Gallego, Alsobrooks and Cortez Masto, all of whom had spent months negotiating the bill, voted no. Republican Senators Susan Collins, Josh Hawley and Jerry Moran also broke ranks to vote against cloture.
Senate Banking ranking member Elizabeth Warren delivered a floor speech opposing the bill, warning it would spark a “crypto-fueled economic crash” if approved. Three fights had dragged the bill out for months: banks wanted language banning crypto firms from paying yield on stablecoins; Democrats wanted stronger conflict-of-interest rules given Trump’s personal crypto holdings; and software developers wanted explicit protection from criminal liability for building non-custodial tools. Senate Republicans released a revised, 630-page draft late Sunday night trying to close all three gaps, adding a state-attorney-general enforcement role on ethics and softening the developer-liability language. It was not enough to move the needed Democrats.
Also read: Revolut Attackers Threaten Daily Data Leaks After Customer IDs Exposed
Why it matters
The failure leaves unresolved how the cryptocurrency sector will be regulated at the federal level, including the respective oversight roles of the Commodity Futures Trading Commission and the Securities and Exchange Commission. The crypto community now expects CFTC Chairman Selig and SEC Chairman Paul Atkins to issue statements confirming both agencies intend to continue advancing crypto regulations independently, regardless of the bill’s outcome. The Digital Chamber, a crypto trade group, called the result a “setback” rather than a defeat and said it would keep pushing for the bill’s passage.
What to watch
With only about 22 working days left on the Senate calendar before midterm campaigning takes over, attention turns to the SEC and CFTC’s own rulemaking process — the fallback Treasury Secretary Scott Bessent has pointed to if legislation stalls. Some experts pointed to $71,000 as a strong support zone for Bitcoin if the selloff continues. This is not financial advice, and crypto markets are volatile and uncertain.
Reported by cointelegraph.com.
Be the first to comment