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President Donald Trump’s push to reshape cryptocurrency regulation suffered a major setback Tuesday when the Senate blocked a procedural motion to advance a sweeping crypto market-structure bill, leaving the industry’s long-sought legislative framework stalled on Capitol Hill.
The Digital Asset Market Clarity Act, known as the Clarity Act, received 49 votes in favor and 50 against — well short of the 60 votes required to advance it. The vote was on whether to invoke cloture on a motion to proceed to the bill, meaning senators did not vote on final passage.
The legislation, H.R. 3633, would establish a federal regulatory framework for digital assets and divide oversight between the Securities and Exchange Commission and the Commodity Futures Trading Commission. A version of the measure passed the House in 2025, but negotiations in the Senate have continued for months over consumer protections, stablecoins, regulatory authority and restrictions on government officials’ financial interests in crypto.
The defeat came despite a last-minute Republican effort to address Democratic concerns. Senate Republicans unveiled a revised version Monday that incorporated 126 substantive changes requested by Democrats, including new restrictions involving elected officials and cryptocurrency.
The changes were not enough to produce the 60 votes needed to move the bill forward.
What the Clarity Act would change
The bill is designed to establish clearer rules for digital assets and determine which cryptocurrencies and related activities fall under the SEC or CFTC.
Under the proposal, the CFTC would receive significant authority over digital commodities, while the SEC would retain jurisdiction over securities and certain investment contracts involving digital assets.
Supporters in the crypto industry have argued that the current regulatory system leaves businesses and investors facing uncertainty over which federal rules apply to different digital assets.
The industry has also grown far beyond Bitcoin, encompassing stablecoins, decentralized finance projects, meme coins and other digital assets. The legislation is intended to create a more defined federal structure for a market that has expanded rapidly.
Critics, however, have argued that the bill would shift too much oversight to the CFTC, which is considerably smaller than the SEC, and could provide crypto companies with a lighter regulatory regime.
Ethics fight becomes a central obstacle
One of the most difficult issues in the Senate negotiations involved restrictions on federal officials profiting from cryptocurrency.
Democrats have argued that the bill’s original ethics provisions did not provide sufficient safeguards against conflicts of interest involving Trump and other government officials with financial ties to the crypto industry.
Those concerns gained additional attention after Trump disclosed substantial income from cryptocurrency-related ventures involving his family.
Republican negotiators responded with new provisions restricting certain activities by federal officials and their spouses, including limitations involving the issuance of cryptocurrencies. The revised bill also included provisions concerning the divestment of certain significant crypto-related financial interests and expanded enforcement authority for state attorneys general.
Democrats nonetheless remained divided over whether the changes provided enough protection against conflicts of interest.
The Senate vote showed the depth of the impasse: Every Democrat who voted opposed advancing the legislation, joined by Republican Sens. Susan Collins of Maine, Josh Hawley of Missouri, Jerry Moran of Kansas and Thom Tillis of North Carolina.
Banks raise concerns over stablecoins
The opposition to the bill extends beyond Washington’s partisan divide.
Banking groups, particularly community banks, have raised concerns about provisions affecting stablecoins — cryptocurrencies designed to maintain a relatively stable value, often by being tied to the U.S. dollar.
One dispute centers on whether stablecoin companies should be permitted to offer financial incentives to customers.
Banking groups have argued that such incentives could encourage consumers to move deposits from traditional banks to crypto companies, potentially reducing the deposits community banks rely on to finance small businesses, farms and other local borrowers.
Crypto companies have disputed that argument, saying customer incentives are comparable to rewards already offered elsewhere in the financial system.
The disagreement has become one of several issues preventing lawmakers from reaching a broader compromise.
What happens now?
Tuesday’s vote does not formally end the Clarity Act’s chances in Congress.
Tillis switched his vote to oppose the procedural motion while preserving the ability to seek reconsideration, leaving open a potential path for another vote. Reuters reported that the crypto industry and Republican supporters are now facing the question of whether they can reopen negotiations and build enough support to advance the bill.
For now, the legislation remains stalled.
The defeat also leaves federal cryptocurrency regulation largely dependent on existing SEC and CFTC authorities rather than a new comprehensive market-structure law from Congress.
The setback comes after months of negotiations and significant lobbying by the cryptocurrency industry, which has made passage of the Clarity Act one of its central legislative priorities.
Whether lawmakers can revive the measure will depend on whether Republicans and Democrats can resolve the remaining disputes over regulatory authority, stablecoins and ethics — and whether there is enough time to do so before the November midterm elections.
For the crypto industry, Tuesday’s vote was not the end of the legislative fight. But it was a clear indication that turning the industry’s long-sought regulatory framework into law will require a broader Senate agreement than supporters were able to assemble this week.
