The U.S. Senate failed to advance the CLARITY Act on Tuesday, dealing a major setback to the cryptocurrency industry’s years-long campaign for a federal market-structure framework.
The procedural vote fell short of the 60 votes required to invoke cloture on the motion to proceed to the bill.
The defeat does not formally kill the Digital Asset Market Clarity Act, but it leaves the legislation with little time to recover before Congress turns its attention to the November midterm elections. The current congressional session ends in January, when a new Congress will take office.
For an industry that has spent years lobbying for legislation to settle the regulatory boundaries between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), the vote marks a sharp reversal after months of bipartisan negotiations.
Republican negotiators had released a revised version of the bill Monday, saying it incorporated 126 substantive changes requested by Democrats. Those changes included new ethics restrictions, additional enforcement authority for state attorneys general and other provisions addressing consumer protection and financial stability.
Sen. Cynthia Lummis, the Wyoming Republican who has been one of the bill’s principal advocates, made a final appeal before the vote.
“Do not let this day be the day we handed our future to someone else because we were too afraid to finish what we started,” she said on the Senate floor. “Let’s vote yes. Let’s not only join the 21st Century economy. Let’s not only join the digital age. Let’s lead it. Let’s define it.”
But the revised language failed to bridge the remaining political divisions.
Ethics Fight Derails Bipartisan Negotiations
The most contentious issue had become provisions governing the ability of public officials to hold or profit from crypto-related businesses.
Democrats had pushed for stronger restrictions aimed in part at President Donald Trump and his family’s crypto interests. The Trump administration and Republican negotiators agreed to additional ethics provisions in the final draft, but Democrats argued that the restrictions did not go far enough.
The banking industry also opposed parts of the legislation, particularly provisions involving stablecoin rewards that banks argued could encourage customers to move deposits away from traditional financial institutions.
The political arithmetic was difficult from the start. Republicans hold 53 Senate seats, meaning the bill needed at least seven Democratic votes even with complete Republican support. Some Republicans were themselves reluctant to back the final version.
The CLARITY Act had already cleared the House in 2025. In the Senate, its supporters had spent more than a year negotiating the details before reaching the final procedural test.
The bill’s central purpose was to establish a federal framework for digital assets, including clearer definitions of which assets fall under SEC jurisdiction and which would be regulated by the CFTC. It would also give the CFTC a substantially larger role in overseeing spot digital-commodity markets.
Congress Still Has One Major Crypto Law
The setback also highlights how much the industry’s legislative progress has depended on issue-by-issue victories.
Congress passed the GENIUS Act, establishing a federal framework for payment stablecoins, earlier this year. That legislation became the first major piece of U.S. crypto-specific legislation to become law after years of congressional deadlock. Market structure was supposed to be the next step.
Instead, the CLARITY Act now faces an uncertain future. Lawmakers could theoretically revive the measure later in the session, but the approaching midterms leave a shrinking legislative window. The Senate is also dealing with other major priorities before lawmakers leave Washington to campaign.
If the bill is not revived this year, the next Congress would have to decide whether to start the market-structure process again.
A change in congressional control could make that considerably harder. Democrats are widely expected to compete aggressively for the House, while a Democratic Senate would put Sen. Elizabeth Warren, one of crypto’s most prominent congressional critics, in line for a potentially influential role on the Senate Banking Committee.
For now, the industry’s biggest legislative campaign has run into the same obstacle that has blocked previous attempts at comprehensive crypto regulation: finding 60 senators willing to agree on what the rules should actually say.