Clarity Act vote failed as all Democrats voted against it, triggering selloff across crypto majors and alts.
Regulation & Gov ·
A Senate procedural vote on the Clarity Act fell short on Tuesday, with the chamber rejecting cloture 49 to 50 against the required 60-vote threshold. All Democrats voted against proceeding, and Susan Collins cast the sole Republican dissent. The bill's chief author, Cynthia Lummis, had signaled defeat hours before the vote. Following the result, Bitcoin dropped to $75,960 (down 4% and the lowest level since August 21), Ethereum fell 5.4% to $2,401, Solana declined 5.1% to $98.15, and XRP shed 9.4%.
Negotiations broke down in the final hours after Republican staff ended discussions on ethics provisions without resolution. Though Republicans had incorporated concessions including state attorney general enforcement and divestment requirements into a Sunday draft, Democrats indicated the language still fell short of their requirements. Odds of passage this year now stand at just 5% on Polymarket, with the Senate breaking for midterms in early October and the political landscape potentially shifting in November.
Despite the legislative setback, operational momentum toward regulatory clarity continues through executive action. The CFTC is drafting rules under existing authority, the SEC proposed blockchain-based stock ownership records and scheduled a trading roundtable, and the CFTC moved to dismiss CME's lawsuit over perpetuals, among other agency moves completed in recent weeks. The trajectory for regulatory guidance therefore remains intact over the next two years under the current administration, though statutes would have provided permanent protections that guidance does not.