CLARITY Act setback sends Coinbase, Circle stocks lower

The CLARITY Act, Congress' most ambitious effort to establish a federal framework for crypto markets, failed to advance in the U.S. Senate on Sept. 15, dealing a setback to legislation that would have clarified how digital assets are regulated by the Securities and Exchange Commission and Commodity Futures Trading Commission.

The bill had support from major crypto companies and some traditional financial institutions, while Republican sponsors said months of negotiations produced more than 120 concessions requested by Democrats.

Related: SEC Chair Atkins reveals what comes next if CLARITY Act stalls

Sen. Cynthia Lummis argued before the vote that the legislation would allow the U.S. to take a leading role in digital assets.

"Let's not only join the 21st century economy. Let's not only join the digital age. Let's lead it."

But that support did not translate into the 60 votes needed to invoke cloture.

The Senate voted 49-50 on the motion to advance the legislation, leaving it short of the three-fifths threshold. After the result was announced, Sen. Thom Tillis entered a motion to reconsider the vote, preserving a procedural path to revisit it.

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The cloture vote was not a final vote on the CLARITY Act. Approval would instead have ended debate on the motion to proceed and allowed senators to formally take up the bill.