CLARITY Act Fails in US Senate Vote, Crypto Market Drops

Key Insights

• Crypto market slips as the CLARITY Act fails to advance after the Senate cloture vote records 39 votes in favor and 36 against.
• The motion needed 60 Senate votes to proceed, requiring support from at least a dozen Democrats.
• Bitcoin falls 3.7% over 24 hours, while Ethereum, XRP, Solana, and BNB also record daily losses.

The CLARITY Act failed to advance in the U.S. Senate after Tuesday’s cloture vote fell short of the required threshold. Senators recorded 39 votes in favor and 36 against, missing the 60 votes needed to proceed. The procedural defeat blocks the legislation from moving into formal Senate debate under the current vote.

The crypto market traded lower around the vote, with several major digital assets recording losses. Bitcoin traded near $75,942.93, down 3.7% over 24 hours and 3.2% during the week. Meanwhile, Ethereum traded at $2,403.95 after falling 5.2% daily and 3.5% weekly.

However, the Senate vote centered on whether lawmakers would begin formal consideration of the legislation. The motion did not represent the final passage of the CLARITY Act.

CLARITY Act Falls Short of 60-Vote Threshold

Tuesday’s motion needed support from 60 senators before the chamber could proceed with the bill. That threshold required Republicans to secure support from at least a dozen Democrats.

Had the motion succeeded, senators would still have faced several additional legislative stages. Those included floor amendments, final Senate passage, and reconciliation with the House version.

Crypto market analyst Ted Pillows said failure would push the legislative process into 2027. He also said the US SEC and CFTC have indicated they would publish rules under their existing authority.

Meanwhile, Grayscale responded after senators declined to move the CLARITY Act into formal debate. The company said regulators continue working on digital asset rules through the SEC and CFTC.

Grayscale also said it would continue engaging policymakers and regulators on U.S. crypto regulation. Its statement followed the failed procedural vote.

Senate Negotiations Expose Divisions Over the Crypto Bill

Before the vote, negotiations continued between Senate Republicans and Democrats over changes to the legislation. Punchbowl News reported that Democrats discussed a counterproposal during a private meeting Monday night.

Senator Mark Warner said Democrats working on the legislation intended to send Republicans that counterproposal. However, he did not identify which provisions it would address.

Republicans had released what aides described as their final legislative offer over the weekend. The proposal included stronger ethics restrictions involving President Donald Trump.

However, Democrats broadly rejected that proposed ethics framework during Monday discussions. Senator Elizabeth Warren outlined what she considered gaps in the ethics provisions to Democratic colleagues.

Senator Raphael Warnock also opposed advancing legislation without stronger provisions addressing corruption concerns. Meanwhile, other disagreements extended beyond the proposed ethics language.

Senator Cynthia Lummis urged senators to advance the crypto market bill, or CLARITY Act, before the vote. She said Democrats secured 126 concessions during negotiations and wrote more than half of the 635-page bill.

Republican Concerns Add Pressure Before CLARITY Act Senate Vote

At the same time, several Republican senators had also expressed concerns about the legislation. Senator Susan Collins described the CLARITY Act as a moving target and remained undecided Monday.

Collins said she needed more time to review its more than 600 pages and its new ethics provisions. She also raised concerns about possible deposit losses for community banks.

According to Punchbowl News, Collins became the seventh Republican to raise concerns linked to community banks. Those concerns added another complication before Tuesday’s procedural vote.

Senator John Curtis took a different position on the immediate Senate process. He said he would support cloture while opposing final passage without additional changes. Meanwhile, Senator John Cornyn said he was still considering how to vote before the Senate action.

Source: www.kucoin.com