Author: David Christopher
Compiled by Deep潮 TechFlow
DeepInsight Summary: The CLARITY bill failed in the Senate with a vote of 49 to 50, far short of the 60-vote threshold. This is not the end for crypto: the CFTC and SEC will continue pushing to implement regulations, but a comprehensive legislative framework that is difficult to overturn is unlikely in the near term. For long-term investors, the timeline for regulatory clarity has once again become uncertain.
Clarity's most recent and highly anticipated vote failed last night.
It’s important to clarify that this vote is not about getting CLARITY passed in the Senate. It merely determines whether senators are ready to move the bill out of its months-long negotiation phase and formally bring it to the full Senate for consideration.
The result was 49 votes to 50, far short of the required 60 votes. It seems they’re not ready yet.
To reach this point
The long-delayed bill reignited hope last weekend, making today’s disappointment all the more painful.
On Sunday evening, Republicans unveiled their final draft of CLARITY, incorporating over 100 substantive amendments proposed by Democrats. Most notably, it includes a much stronger set of ethics rules, which President Trump has agreed to—intended to address one of the biggest obstacles supported by Democrats.
Under the new rules, "covered" officials, including the President, Vice President, members of Congress, federal judges, other senior officials, and their spouses, are prohibited from issuing or promoting digital assets. However, this restriction does not apply to the children of covered officials. They are also prohibited from holding more than $15,000 in equity in a business whose primary income comes from issuing or "sponsoring" digital assets.
For officials like Trump, who are already involved in such business interests, they must either sell their shares or transfer them into a qualified blind trust—that is, a trust managed by an independent trustee.
In addition, a crucial aspect of these ethical restrictions is that they grant state attorneys general the authority to enforce the rules. This addresses Democratic concerns that, otherwise, enforcement power might primarily rest with Trump’s own Department of Justice, which would take no action against him.
These changes now appear to have a chance of gathering enough votes.
Protocol breakdown
But by Monday evening, Democrats returned with a counterproposal calling for stricter ethical restrictions.
The full proposal has not yet been made public, but reports indicate that Democrats seek to expand the rules to more directly cover the children of officials and require public officials with significant interests in crypto companies to actually liquidate their assets rather than simply transferring them to trusts. Concerns remain about whether the enforcement mechanism still leaves the president too insulated from actions by state attorneys general.
Republicans firmly rejected the counterproposal on Tuesday morning. A spokesperson for Senator Cynthia Lummis said the proposal "looks identical to the Democrats' position from weeks ago." Democrats countered that they have been advocating for these provisions for most of the past year.
By this point, the optimism surrounding the bill’s passage had largely dissipated. However, for the market, Bitcoin only declined after CLARITY’s actual vote failed: it plunged as much as 4%, briefly dipping below $75,000, before beginning to recover.
What should I do next?
Specifically for CLARITY, the path ahead is not clear.
Technically, the bill is not dead. Lawmakers could return to the negotiating table, make further concessions, and attempt another vote. However, reports suggest that Republicans appear quite weary, while Democrats do not seem willing to compromise. Added to this, the calendar is now heavily against them: Congress is preparing to leave Washington ahead of the November midterm elections.
It is still possible to push for another vote after the election, or if lawmakers unexpectedly reach an agreement before then. However, today’s failure has significantly reduced the likelihood that CLARITY will re-emerge as a top legislative priority this fall.
However, it is important that the development of encryption standards itself will not stop.
The CFTC and SEC will continue to use their existing authorities to issue rules and clarify how current commodities and securities laws apply to crypto assets. The limitation is permanence: these agencies can still exert influence, but they cannot generate the certainty that a comprehensive law like CLARITY would provide, and these rules may be overturned or rewritten by future administrations. That said, I still expect crypto’s mainstream adoption to continue, even if the process becomes chaotic again.
But if we want this mainstream adoption to be etched in stone, with a framework that is much harder to reverse, it seems we can only continue to wait. When that will happen, no one knows.