Key facts
- The US Senate failed to advance the Clarity Act in a 49-50 vote.
- Democrats voted as a bloc against the bill, joined by three Republicans.
- Senator Thom Tillis (R-NC) switched his vote to 'no' procedurally.
- Negotiations for the bill continued until the vote, with accusations of bad faith from both sides.
- Some Democrats involved in negotiations stated the bill is not dead and they remain committed to passing it.
- SEC Chair Paul Atkins linked a new innovation exemption for tokenized stocks to the bill's failure.
The US Senate narrowly failed to advance the Clarity Act, a significant piece of legislation aimed at regulating the cryptocurrency market, in a procedural vote of 49-50. The bill's defeat has shifted the focus from Congress to regulatory bodies like the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), which are now seen as the primary drivers for establishing crypto rules.
Democrats voted unanimously against advancing the bill, with three Republicans – Sens. Susan Collins (R-ME), Josh Hawley (R-MO), and Jerry Moran (R-KS) – joining them. Senator Thom Tillis (R-NC) initially voted yes but switched to no as a procedural move. The vote fell short of the 60 votes required to move the bill forward.
Accusations of bad faith negotiations were exchanged between parties. Senator Cynthia Lummis (R-WY), a key architect of the bill, criticized Senate Democrats for not being serious about regulation, while some Democrats suggested Republicans forced the vote prematurely. However, several Democratic senators involved in the negotiations, including Sen. Angela Alsobrooks (D-MD), stated that the bill is not dead and they remain committed to finding a bipartisan path forward.
Amid growing industry fatigue with congressional inaction, many in the crypto space are now looking to regulators. SEC Chair Paul Atkins explicitly linked the agency's new innovation exemption for tokenized stocks to the Clarity Act's failure. The SEC released this measure on Thursday, allowing tokenized US stocks to trade on-chain. Concurrently, the CFTC issued a no-action position for passive software providers and submitted a broader crypto rulemaking proposal to the White House for review.