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The CLARITY Act failed to advance in the US Senate on Tuesday, September 15, dealing a major setback to the crypto industry’s biggest regulatory push in years.
Senators voted 49-50 on a procedural motion to move forward with the bill. It needed 60 votes. The vote was on whether the Senate should begin considering the legislation, rather than final passage.
So why did it fail?
1. Democrats Wanted Trump to Sell Large Crypto Holdings
This became the biggest disagreement in the final hours.
Republicans made a major concession before the vote. Their final bill required senior officials with a “significant financial interest” in certain crypto companies to either sell that interest or place it in a qualified blind trust.
Democrats wanted to go further.
Their final counteroffer would have required officials with a “very large interest” in a crypto company to sell it, removing the blind-trust option for those holdings. Democratic negotiator Angela Alsobrooks said divestment was the major unresolved issue before the vote.
The difference is simple. Under the Republican proposal, an official could remain financially invested through a blind trust. Democrats wanted very large interests sold completely.
Crypto billionaires have spent nearly $300M on the midterm elections.
Meanwhile, Trump and his family have pocketed more than $1.4B from crypto deals.
Now the crypto industry wants Congress to do its bidding by passing the corrupt CLARITY Act.
The Senate must say NO.
— Bernie Sanders (@BernieSanders) September 15, 2026
2. Democrats Wanted the Rules to Cover Trump’s Children
The Republican bill covered senior elected officials, federal judges and their spouses. Democrats wanted the ethics restrictions expanded further, including to children of covered officials.
That was particularly relevant because Donald Trump Jr., Eric Trump and Barron Trump have links to World Liberty Financial.
The Democratic counteroffer also sought tighter restrictions around paid crypto promotions.
Republicans rejected those additional changes on Tuesday morning. Sen. Cynthia Lummis’ office argued Democrats were repeating demands Republicans had already considered during months of negotiations.
Today, I voted no on the Clarity Act, legislation meant to regulate cryptocurrency in America.
The ethics provisions in this bill are simply too thin. President Trump, his children, and his Cabinet are making billions of dollars in the crypto space, in part from bilking everyday…
— Sen. Elissa Slotkin (@SenatorSlotkin) September 15, 2026
Republicans had already moved considerably on enforcement.
Earlier versions gave the US attorney general the main enforcement role. Democrats argued that created an obvious problem: a Justice Department controlled by the president could be responsible for enforcing ethics rules against that same president.
The final Republican bill gave state attorneys general a role in enforcement, one of the concessions President Trump accepted before the vote.
Democrats still argued that the mechanism left too much authority inside the federal administration and could make enforcement difficult in practice.
Source: finance.yahoo.com