Key facts
- The White House blamed Senate Democrats for blocking the CLARITY Act, a crypto market bill.
- Senator Cynthia Lummis stated that Democrats voted against the bill despite the incorporation of all their requested changes.
- Democrats cited concerns that the final ethics language did not adequately address President Trump's and his family's crypto ventures.
- The Senate vote to begin debate on the CLARITY Act was 49-50.
- The CLARITY Act aimed to establish a market structure framework for the crypto industry, clarifying oversight between the SEC and CFTC, and adding consumer protections.
- A vote on the CLARITY Act is unlikely before the November midterm elections.
The White House and Senator Cynthia Lummis have criticized Senate Democrats for blocking the CLARITY Act, a significant piece of legislation intended to establish a comprehensive market structure for the cryptocurrency industry. The bill failed to advance in the Senate, with a cloture vote of 49-50, falling well short of the 60 votes required to proceed.
The White House official stated that Democrats were responsible for the failure, accusing them of engaging in political games that hinder American technological advancement and innovation. Senator Lummis, a key Republican negotiator for the bill, echoed this sentiment, asserting that all Democratic-requested changes, including comprehensive ethics provisions, were incorporated into the legislation. She claimed Democrats made new demands after their initial requirements were met, suggesting their opposition was politically motivated and that they "hate President Trump more than they like good policy."
Democrats, however, countered that the final ethics language did not sufficiently address the crypto ventures of President Trump and his family. White House crypto adviser Patrick Witt also pointed fingers at big banks for contributing to the bill's derailment, in addition to blaming Democrats for turning President Trump's businesses into a political weapon. Republicans maintained that the bill included over 120 Democratic-requested changes, such as ethics language modeled on a bipartisan proposal and a role for state attorneys general.
The CLARITY Act aimed to clarify regulatory oversight between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), introduce consumer and bankruptcy protections, and set rules for crypto exchanges, brokers, and software developers. With the November midterm elections approaching, the likelihood of another vote on the CLARITY Act in the Senate this year is considered low. In the interim, federal regulators like the SEC and CFTC are proceeding to write crypto rules under existing legal frameworks.