The Senate has blocked consideration of the Clarity Act, dealing a major setback to the cryptocurrency industry’s effort to secure business-friendly rules in the United States.
The legislation, which passed the House in July 2025 with bipartisan support, had been developed through months of negotiations involving crypto executives, Congress and the White House. Tuesday’s vote makes it unlikely to become law soon, with the November midterm elections narrowing the time available to advance it.
The defeat came despite more than $100 million in political spending by the crypto industry. Executives had made the Clarity Act their central policy priority, hoping it would establish lasting protections against a return to the aggressive regulatory approach pursued under the Biden administration.
During that period, US financial regulators brought lawsuits against major companies including Coinbase and Kraken. Regulators argued that digital currencies should be governed by the same strict rules as securities such as stocks and bonds.
The industry responded by spending more than $130 million through a network of super PACs, helping elect pro-crypto legislators in the 2024 election. After taking office, President Trump ended the regulatory crackdown, but the industry still sought legislation to place his pro-crypto position into law.
A successful Clarity Act would have reduced the risk of a future administration reviving the Biden administration’s legal strategy, according to the industry’s position. However, the bill encountered resistance in the Senate, including from the influential banking lobby, which argued that it could divert traditional bank deposits into crypto and harm banks.
Dispute over Trump’s crypto profits
The latest debate focused chiefly on Mr Trump’s financial interests in cryptocurrency. Democrats have largely opposed the bill, arguing that it did not do enough to prevent the president and other public officials from using crypto ventures to make money.
Mr Trump generated $1.4 billion from a network of crypto businesses last year, according to the material presented in the Senate debate.
Republicans released revised language this week aimed at addressing the ethics concerns. A summary of the draft said it would bar federal officials from “issuing or sponsoring a digital asset” and give state attorneys general a role in enforcing the rules.
The changes were intended to meet a demand made by Democrats during an earlier stage of negotiations. Democrats remained dissatisfied, however, with Senator Richard Blumenthal, a Connecticut Democrat, describing the proposed rules as a “charade” and a “sham”.
Virginia Canter of Democracy Defenders Action, an advocacy group, said the proposal left significant loopholes for Mr Trump. “The president’s latest attempt to write his own crypto ethics bill leaves wide loopholes, giving himself time to restructure his crypto venture companies so that he can continue to draw down unprecedented profits,” she said.
The Senate’s action represents an enormous disappointment for crypto executives and leaves the industry’s main legislative objective stalled as the midterm elections approach.
