US Senate fails to advance CLARITY Act

The US Senate on Tuesday failed to pass a cloture motion on the Digital Asset Market Clarity (CLARITY) Act that would have established the country’s first regulatory framework for digital assets.

With less than 36 days of business before 2027, when a new session of Congress is scheduled to be sworn in after November’s midterm elections, the bill will likely not see further action for the rest of the year.

The setback leaves unresolved how the cryptocurrency sector will be regulated at the federal level, including the respective oversight roles of the Commodity Futures Trading Commission and the Securities and Exchange Commission.

The bill stalled before Congress’ August recess over proposed ethics provisions that would restrict government officials and their families from issuing or profiting from digital assets while in office. Although President Donald Trump agreed to most of a bipartisan proposal to strengthen those restrictions ahead of Tuesday’s vote, new opposition emerged Monday from 18 state attorneys general who argued the bill would weaken states’ ability to police crypto fraud and misconduct.