Crypto industry faces setback as Senate blocks Clarity Act

Summary:

– Senate vote blocks the Clarity Act from advancing on a 49-50 vote.

– Democrats and four Republicans opposed moving the crypto bill forward.

– Crypto and banking interests remain divided over digital asset regulations.

WASHINGTON — The U.S. Senate’s vote against advancing a major crypto bill amid persistent opposition from Democrats and a handful of Republicans marks one of the most significant setbacks for the industry, showing the limits of its muscle in Washington.

Senators on Tuesday voted 49-50 against advancing the Clarity Act, which would establish a regulatory framework for the $2 trillion cryptocurrency market, putting the industry on a firmer legal footing, with four Republicans voting against. Crypto companies say the bill is crucial to their future in the U.S.

The defeat came even after the industry spent more than $300 million combined on the 2024 and 2026 elections to push crypto policy into the political mainstream by getting dozens of crypto-friendly candidates into office and through national advocacy campaigns.

Tuesday’s defeat showed that even the crypto political machine can stumble when faced with enough political challenges, although with a roughly $130 million war chest remaining, it’s unlikely to be down for long, said analysts, executives and academics.