Crypto Democrats Are Ghosting the Industry

Last week, in the background of the Senate’s desperate scramble to get through the backlog of agenda items that have been piling up all summer, a dramatic showdown of money and power took place over the cryptocurrency industry’s top legislative priority, the CLARITY Act, which would sort digital assets into different categories and split regulation—though regulation is a strong word for the proposed framework in the bill—between the Securities and Exchange Commission (SEC) and the smaller and more industry-friendly Commodity Futures Trading Commission (CFTC).

The crypto industry was hoping the threat posed by their $136 million war chest would scare enough Democrats to win the 60 votes necessary to overcome a filibuster before the August recess began, and the future of the legislation would become all that much more uncertain ahead of the November midterms.

But amidst outrage over the $1.4 billion crypto windfall (and counting) that President Trump has taken in during his second term, along with concerns over insufficient safeguards against illicit finance and a stablecoin yield loophole threatening bank deposits, even the most historically reliable allies for the industry within the Senate Democratic caucus—who still support the CLARITY Act’s broader vision—were steadfast in their opposition to the bill in its current form. Despite the industry’s desperation for a vote last week, Democrats managed to delay it until after the recess, and duck for now the scorched-earth revenge campaign from the industry’s political spending arm that might have resulted from voting no.