Senate Blocks Landmark Crypto Regulation Bill

(Bloomberg) -- Senators from both parties blocked a landmark digital asset market structure bill in a procedural vote Tuesday, sending cryptocurrency stocks tumbling after a major setback for industry.

The long-stalled legislation sought by crypto firms would hand the Commodity Futures Trading Commission the primary authority to regulate the digital assets industry. It needed 60 votes to advance and failed on a vote of 49-50, with Democrats citing continued concerns over ethics provisions meant to address President Donald Trump's crypto business interests.

A few Republicans joined with Democrats in opposing the measure, including Susan Collins of Maine and Josh Hawley of Missouri. Collins is in a tough fight for reelection, while Hawley has been a crypto skeptic. Even pro-crypto Democrats like New York's Kirsten Gillibrand ultimately voted against moving forward with the bill.

Shares of exchange Coinbase Global Inc. extended a decline to as much as 12%, while stablecoin issuer Circle Internet Group Inc. fell 13%. Bitcoin, the largest cryptocurrency, dropped as much as 5.3% to below $75,000 after the bill failed to get the requisite votes.

The defeat is a major blow for crypto industry players who have invested hundreds of millions of dollars and years of effort in securing favorable, durable rules from Congress, and comes less than two months before the midterm elections.