US Senate Rejects Clarity Act as Crypto Market Focus Shifts to Presidential Ethics

The US Senate rejected the Digital Asset Market Clarity Act after a 49-50 vote failed to reach the 60 votes required to advance the measure. The proposed legislation aimed to establish a comprehensive federal framework for digital assets by dividing regulatory oversight between the SEC and the CFTC, while introducing registration rules and anti-money-laundering requirements. The opposing vote included all Democratic senators and four Republicans, with critics arguing the bill gave excessive authority to the smaller CFTC.

Following the defeat, lead sponsor Senator Cynthia Lummis stated that negotiations were over and the bill would not return to the floor, despite over 120 previous revisions and last-minute ethics additions. Industry discussion subsequently focused on Donald Trump's commercial crypto ventures, which generated an estimated $1.4 billion in income over the past year. Industry figures such as Paradigm senior adviser Justin Slaughter, alongside lawmakers including Senator Elizabeth Warren, argued that these business interests turned the legislative effort into a debate over executive ethics.

Community bank representatives also lobbied against the bill prior to the vote. Despite the legislative setback in Washington, Bitcoin gained 6% to move past $80,000 three days after the Senate vote.