The failure of the CLARITY Act in the Senate on Tuesday leaves players in digital assets in the same position they have held for nearly a decade: continuing to build without knowing which regulator will eventually knock on the door.
Trading infrastructure, tokenisation and payments leaders describe this setback as a full stop, not a detour, and believe the heaviest cost will not fall on pure-play crypto players, but on banks and institutions that are still waiting for a real code of conduct before committing capital.
The Senate proceeded to a cloture vote at 2:15 p.m. (New York time) on the Digital Asset Market Clarity Act, an indispensable procedural step to end the debate and move the bill to consideration. Sixty votes were needed; the motion did not reach that threshold. Majority leader John Thune had filed the cloture motion on August 8 to prepare for the vote, giving the two sides five weeks to rally support.
The arithmetic was tight from the start. Republicans have 53 seats: even in a close lineup, they needed at least seven Democrats or independents, which was never guaranteed. Senator John Cornyn was still weighing it a few days before the vote, and Senator Susan Collins was among those expressing reservations on behalf of community banks.
The bill was meant to settle the question the industry has been raising for the longest time: who supervises what? The CFTC would have taken the lead on the spot market for tokens considered « digital commodities, » while the SEC would have retained oversight of tokens that remain investment contracts—along with registration obligations, standards for platforms and brokers, a regulatory treatment for decentralized finance, and a set of ethics rules.
Nothing is formally repealed by Tuesday’s vote: the House adopted its own version in 2025, so it remains on the table. But this failure effectively freezes the bill’s review in the Senate, as the window is closing. The House canceled its weeks of votes on September 21 and September 28 and should leave Washington after September 17, leaving only about four legislative days before attention turns to the midterm elections. Prediction markets have already brought the probability of the bill becoming law this year to around 18%, down from nearly 90% in February.
Markets took it badly. Bitcoin (BTC) flirted with $79,530 overnight before dropping back to around $77,400—about -3%—and kept sliding as it became clear that the bill would not pass.
A setback, but not a death sentence
Reactions in the industry have converged around the same diagnosis.
Vladimir Tikhomirov, founder of Theorem and co-founder of Algebra, describes the decision not to move the bill forward as a setback—especially given how little time remains on the parliamentary calendar. Still, he refrains from seeing it as a substantive judgment about the market, noting that prices remain far more sensitive to interest rates, dollar liquidity, and the macroeconomic environment than to an isolated vote in Washington.
Bernardo Brites, co-founder and CEO of Trace Finance, is more blunt. « The failure of the CLARITY Act is a huge setback for our industry, but not a fatal blow, he explains. For years, crypto businesses have been operating in a gray area, facing regulators who favor a case-by-case approach—through enforcement, reactive and punitive toward innovation rather than truly steering it. Unfortunately, this episode is far from over. »
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According to him, the bill would have provided the only thing that builders have been asking for for years: a clear boundary between the SEC’s scope and the CFTC’s scope. Without that, « digital commodities » remain without a clear regulatory anchor, the rules on stablecoins stay disconnected from the advances of the GENIUS Act, and founders keep asking themselves whether raising funds or listing a token exposes them to legal disputes.
« For founders and development teams, that means continuing to operate based on hope rather than rules, » he continues. It also means that institutional volumes will remain higher for longer than they should be on the margins of the market, and that the big wave of participation from established players—so eagerly anticipated—moves even further away. »
A gap that can be seen in the secondary market
Tikhomirov’s concern focuses on a segment of the market that rarely takes center stage in political debates: tokenized real-world assets. They remain, he says, without a real model for what happens after issuance.
« There is still no blueprint for how these assets can be traded, how liquidity is structured around them, and how investors can actually exit their positions, » he notes.
He nevertheless insists that regulators have other levers: the SEC, the CFTC, and other agencies can continue producing rules without going through Congress. The risk, he warns, is then seeing more patches rather than a coherent framework: tokenization is moving ahead, but the regulatory plumbing of the secondary markets is taking much longer to be put in place.
Why adopting an imperfect bill remains preferable
Eric Barbier, CEO of Triple-A, picks up the argument that follows the bill in every new round of amendments.
« The debate over the strengths and weaknesses of the CLARITY Act will continue after today’s failed vote, but I remain convinced that imperfect regulation is better than having no regulation at all, » he argues.
His reasoning rests less on the direct impact on token prices than on the effect on risk committees at major groups. « A regulatory framework like the CLARITY Act can have a catalytic effect by finally giving major American companies and institutions the confidence they need to engage in digital assets with a minimum of certainty—where many have avoided this market until now. »
Barbier cites an example from existing legislation on stablecoins. « We have observed a comparable scenario with the adoption of the GENIUS Act: the creation of regulatory safeguards accelerated the adoption of stablecoin payments by major groups, while strengthening consumers’ trust in this payment method. »
He frames the vote as primarily a domestic issue rather than a sectoral one, emphasizing that progress in Europe, the United Kingdom, the United Arab Emirates, and Singapore is already fueling a convergence of rules dynamics and, eventually, institutional adoption—whatever the pace of the U.S. Congress.
Brites reaches the same conclusion through a different route. Banks will adopt stablecoins and blockchain rails will underpin modern finance with or without a specific U.S. law, he estimates, but each delay is a missed opportunity for the United States to consolidate leadership that it currently only holds by default.
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