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The US Senate on Tuesday failed to pass a cloture motion on the Digital Asset Market Clarity (CLARITY) Act, blocking a bill that would have created the country’s first regulatory framework for digital assets. According to Cointelegraph, the setback means the legislation is unlikely to move forward for the rest of the year, with less than 36 days of business remaining before 2027, when a new session of Congress is scheduled to be sworn in after November’s midterm elections. The failure leaves unresolved key questions about how the cryptocurrency sector will be regulated at the federal level, including the division of oversight between the Commodity Futures Trading Commission and the Securities and Exchange Commission.
The bill had already stalled before Congress’ August recess amid debate over ethics provisions that would have restricted government officials and their families from issuing or profiting from digital assets while in office. U.S. President Donald Trump agreed to most of a bipartisan proposal aimed at strengthening those restrictions ahead of Tuesday’s vote, but the measure faced renewed resistance on Monday from 18 state attorneys general. They argued that the bill would weaken states’ ability to police crypto fraud and misconduct. The latest setback adds to uncertainty over the future of federal crypto regulation as lawmakers remain divided over both ethics safeguards and the scope of state and federal authority.