The Big Crypto Whiff

The Digital Asset Market Clarity Act (or CLARITY Act) was supposed to usher in a new era for the crypto industry. It was going to give them special treatment to skirt securities regulation, and enshrine that special treatment in statute. It was going to bring the appearance of legitimacy that only an official regulatory framework can bring to an industry inundated with fraudsters, sanction evaders, and terrorists. If the bill passed, it was absolutely going to be worth the staggering $206 million the industry has spent on the midterms so far, more than any other corporate interest, on top of the $133 million spent on congressional races the last time around.

Except it didn’t happen. On Tuesday, Senate Democrats and a small group of Republicans shot down a vote to advance the bill on the Senate floor, delivering a devastating blow to the crypto world and their once formidable political machine.

More from Eleanor Davis-Diver

The crypto industry emerged as an apparently unstoppable force in Washington politics in 2024 after spending tens of millions to oust a prominent critic in then-Banking Committee Chairman Sen. Sherrod Brown (D-OH), and a successful courtship with President Trump shortly before he won re-election. But Tuesday’s vote—and the months of repeated delays and fruitless negotiations leading up to it—pulled back the curtain. What stands behind is a deeply unpopular financial product with no legitimate use cases, and a political arm poisoned by its association with Donald Trump, who has (along with his family) been running nonstop crypto scams since he took office. Crypto’s vast money was no match for the anger rising among the electorate sparked by Trump’s egregious corruption and corporate influence over politics.