Democrats Tank CLARITY Act, Crypto Bill Sees the Senate Exit 🪧

The White House blamed Senate Democrats on Thursday for blocking the CLARITY Act after the crypto market structure bill failed to pass in the upper chamber, accusing lawmakers of putting political games ahead of American technology and innovation. Senator Cynthia Lummis echoed that criticism, saying the Democratic Party voted against the bill even after incorporating all requested bipartisan requirements.

A White House official said in a statement, "The Democrats are to blame for the failure of the Clarity Act because they put political games over doing what's best for American technology and innovation." The official added, "The Trump Administration agreed to the most comprehensive and wide-ranging ethics provision in history." Lummis argued that Democratic-requested changes were added to the bill but that every Democrat still voted "No."

Democrats countered that the final ethics language did not adequately address President Donald Trump and his family's crypto ventures, a concern that lingered throughout negotiations. The dispute over ethics provisions became the central sticking point in the final days before the scheduled vote.

The bill's collapse marks a setback for efforts to establish a formal market structure framework for digital assets, including oversight of spot trading in assets such as $BTC and $ETH. Industry participants had backed the CLARITY Act as a way to clarify the jurisdictional lines between the Securities and Exchange Commission and the Commodity Futures Trading Commission over crypto markets.

With November midterm elections approaching, another CLARITY Act vote this year is widely seen as unlikely, and both parties are expected to use the failed bill as a campaign issue heading into the cycle.