A significant cryptocurrency regulatory proposal supported by President Donald Trump has encountered major setbacks in the Senate, making its future uncertain.
The Clarity Act couldn’t clear an essential procedural requirement on Tuesday, marking a significant defeat for its advocates, which include influential figures in the crypto sector and the administration, as they aim to integrate cryptocurrencies into existing financial regulations.
While Democrats primarily opposed the bill, some Republicans also raised concerns. With limited time left in the Senate and numerous other key issues looming before the midterm elections, supporters of the Clarity Act fear it may be put aside indefinitely.
“I think we’re done. It’s over,” said Senator Cynthia Lummis, R-Wyo., who has been a primary architect of the legislation. “We’ve been working on this bill for over a year. We’ve accommodated more than 120 of their requests, and that should be enough.”
When asked about the possibility of the bill resurfacing, Lummis replied, “Nope.”
An urgent last-minute update to the legislation aimed to win over undecided votes, but it ultimately fell short.
Senator Cory Booker, D-N.J., expressed skepticism before the vote, stating, “I haven’t seen the final bill yet, but what I’ve seen is bad.”
The Clarity Act faced numerous issues that concerned both sides. Some Senate Democrats found the ethical guidelines insufficient to address the rapid growth of Trump’s family’s cryptocurrency business, reportedly experiencing a staggering 250% increase in income from 2024 to 2025, rising from over $620 million to around $2.2 billion.
This uptick has largely stemmed from Trump’s various crypto ventures managed by his sons, Don Jr. and Eric, according to disclosed financial documents.
Others pointed out that provisions addressing foreign money laundering lacked adequate strength. Senator Andy Kim, D-N.J., noted, “I haven’t seen enough engagement from Republicans regarding countering terrorist financing and cartel financing. That would persuade me to support it.”
Despite these issues, some lawmakers believed it was essential to advance the bill to make necessary adjustments.
Senator John Cornyn, R-Texas, was still weighing his options before the vote, voicing concerns about how integrating cryptocurrency could affect interest rates at community banks and the potential for misuse. He argued that the legislation could be improved if it progressed.
“What we used to do around here is something called legislate,” Cornyn remarked, indicating that votes usually lead to discussions and amendments before final support is determined.
The bill’s defeat now allows the Senate to move forward with other legislative priorities, such as Senator Ted Cruz’s proposal aimed at providing protections for student-athletes amidst the rising financial demands of college athletics.
“We committed to ensuring a vote on college sports,” said Senate Majority Leader John Thune, R-S.D. “We’ll see if we can gather the 60 votes needed. I’m not sure about that yet, but I’m hopeful.”
