The US Senate’s vote against advancing a major crypto bill amid persistent opposition from Democrats and a handful of Republicans marks one of the most significant setbacks for the industry, showing the limits of its muscle in Washington.
Senators on Tuesday voted 49-50 against advancing the Clarity Act, which would establish a regulatory framework for the $2 trillion cryptocurrency market, putting the industry on a firmer legal footing, with four Republicans voting against. Crypto companies say the bill is crucial to their future in the US.
The defeat came even after the industry spent more than $300 million combined on the 2024 and 2026 elections to push crypto policy into the political mainstream by getting dozens of crypto-friendly candidates into office and through national advocacy campaigns.
Tuesday’s defeat showed that even the crypto political machine can stumble when faced with enough political challenges, although with a roughly $130m war chest remaining it’s unlikely to be down for long, said analysts, executives and academics.
In this case, US President Donald Trump’s personal crypto dealings became a flashpoint for Democrats just as their prospects improved ahead of the November midterms, while fierce opposition from the influential banking lobby dragged talks deeper into election season and also succeeded in peeling off some Republicans, they said. Democrats are likely to win the House in November, although the race for Senate control is too close to call.
While Tuesday’s vote was procedural, it was widely seen as a litmus test that would determine the bill’s fate. The crypto industry vowed to keep fighting to revive it.
“The industry is going to continue to advocate for pro-crypto policy. That means supporting pro-crypto candidates, whether they’re on the left, right, in the centre,” said Kevin Wysocki, head of policy at crypto platform Anchorage Digital.
The bill aims to fix what the industry says is legal ambiguity by determining which cryptocurrencies fall under securities or commodities laws. The sector has argued, often successfully, that such legislation would safeguard American innovation and jobs.
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