CLARITY Act stalls after Senate rejects key vote 49–50

The CLARITY Act has failed to advance after being unable to scale through a critical procedural vote, after the US Senate refused to advance the legislation.

Senators voted 49–50 in favour of ending the preliminary debate, meaning the bill fell short of the 60 votes required. The historic crypto bill remains deadlocked with lawmakers differing on ethics, financial risks, and consumer protection. 

CLARITY Act falls short of Senate support

The Tuesday vote was not a decision on whether the Senate should pass the CLARITY Act, but on whether it should go forward to consider the bill. But being unable to secure 60 votes means the legislation will not progress for now.

Under the legislation, regulatory responsibility for digital assets rests mainly with the Securities and Exchange Commission [SEC] and Commodity Futures Trading Commission [CFTC]. There are also rules that cover token issuers, banks, and software developers.

Although the Republicans published the last draft with extra new ethical rules a short period before the vote, the Democrats withheld their support.

Senator Elizabeth Warren also argued that restrictions currently in place still have weaknesses through which President Donald Trump could directly profit through his crypto businesses and influence the rules governing the industry.

“We need crypto legislation that stops political self-dealing,” Warren said before urging senators to vote against advancing the bill.

She also said the bill could undermine consumer protections, narrow enforcement by individual states, and empower big banks to get riskier with crypto investments.

Lummis defends concessions to Democrats

Senator Cynthia Lummis rejected Warren’s criticism, saying the proposal has been in the works for more than a year.

According to Lummis, the Democrats won 126 concessions and wrote more than half of the 635-page text. She also said its altered language had also created a role for the states’ attorneys general to enforce its ethics rules.

“This is what compromise looks like,” Lummis told senators before the vote.

While delivering competing speeches, they disagreed on what they believed the provisions would in fact do. Warren believes enforcement against the president would remain under federal control, while Lummis presented the provisions as giving states direct authority.

Prior to the results being read, Sen. Tillis switched his vote from yes to no to create the opportunity to appeal the result. This move by Tillis gave Senate leaders a way to get another vote on the measure down the road.

The bill has therefore not been permanently defeated, but its supporters must find at least 11 additional votes before it can overcome the Senate’s procedural barrier.

Final Summary

• The Senate voted down, 49 votes to 50, a motion to bring the CLARITY Act to a vote.
• A motion to reconsider leaves open the possibility of another vote.