On Tuesday, 15 Sep 2025 GMT+7, U.S. Senate members voted against passing the Digital Asset Market Clarity Act, or Clarity Act, blocking its progress after prolonged efforts to establish comprehensive cryptocurrency industry regulations, causing further delays.
The vote tallied 50 in favor and 49 against, falling short of the 60 votes needed to advance the bill. This threshold required support from at least 7 Democrats plus all 53 Republicans.
Republicans explained that the latest version of the bill had been amended over 100 times based on Democratic demands, including stricter ethical standards.
Senator Elizabeth Warren of Massachusetts, a Democrat, was among the persistent critics, stating the bill "still does not sufficiently protect investors, the financial system, or national security."
The bill spans over 600 pages and, if enacted, would mark the first federal-level regulation of the U.S. crypto industry. A previous version had passed the House last year but stalled in the Senate.
Although the vote failed, the crypto industry views it as a first step toward serious Senate consideration of the Clarity Act, opening the door for further negotiations before returning to the House if amended.
Following the announcement, crypto-related stocks immediately declined: Coinbase closed down 10%, Circle—the issuer of stablecoins—fell over 11%, and Bitcoin dropped as much as 5.3%, dipping below $75,000.
In recent months, the likelihood of the Clarity Act passing has steadily declined due to ongoing opposition from key Democrats.
However, this defeat does not mean a prolonged crypto market slump, as the AI craze has diverted retail investor attention, while tighter liquidity and reduced risk appetite have prolonged the bear market.
The Clarity Act would have provided a clear legal framework, enabling market participants to better decide on investing, expanding, or making deals within the U.S.
Regulatorily, the bill sought to clearly define authority boundaries between the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), specifying which digital assets are commodities and which are securities.
This legislation would reduce current uncertainties faced by exchanges, brokers, dealers, and crypto market players, clarifying which federal regulator they should register with.
One missing market booster is the failure of the Clarity Act to pass. The already sluggish market may become even more stagnant.
"If the Clarity Act had passed, crypto would likely become a consensus pick among institutional investors in Q4," said Matthew Hougan, Chief Investment Officer of Bitwise Asset Management. "It would have sparked a strong bull market, but without it, the market faces challenges, though crypto is still expected to rise this year, albeit more slowly."
Another factor is that regulatory calm appears temporary. Regulators continue to issue rules without the Clarity Act. The industry has experienced political shifts before, such as Coinbase and other major crypto firms facing SEC lawsuits that were later dropped under the Trump administration.
Had the Clarity Act passed, it would clarify the legal questions behind such disputes, defining which digital assets are securities or commodities and which agencies oversee them. Without it, regulators and courts gain more influence.
Additionally, Wall Street deals may be delayed. This regulatory uncertainty could postpone acquisitions of crypto exchanges, digital asset custodians, and asset management firms.
Brian Dixon, CEO of Off the Chain Capital, a crypto investment fund, said prospective buyers want clearer regulations before making large acquisitions. Although the SEC and CFTC may eventually clarify rules, the governmental rulemaking process is lengthy and may face legal challenges or changes under new administrations.
Moreover, banks complicate matters by opposing parts of the Clarity Act, especially provisions related to stablecoin yields, fearing it could divert deposits from traditional banks.
Source:Bloomberg,Yahoo! Finance
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