CLARITY Act Falls Short in Senate; SEC and CFTC Press Ahead With Crypto Rulemaking

The Senate failed to move the CLARITY Act forward Tuesday after the measure came up short of the 60 votes required to advance, ending in a 49–50 vote. The outcome redirected market and industry focus toward federal regulators, with the SEC and CFTC stepping up work on crypto-related rules spanning tokenized stock trading, relief for certain software providers and broader market oversight. The vote capped more than a year of bipartisan negotiations on Capitol Hill. Discussions were still underway in the Capitol basement shortly before the roll call, according to Crypto In America. A Democratic staffer said Sen. Thom Tillis favored delaying the vote to allow additional talks, but a staffer for Senate Banking Committee Chair Tim Scott ended the discussions without explanation. Lawmakers from both parties later offered conflicting accounts of why the talks collapsed. Democrats opposed the bill, joined by Republican Sens. Susan Collins, Josh Hawley and Jerry Moran. Tillis later switched his vote, a procedural move that preserves a path for a subsequent vote. Sen. Cynthia Lummis, the bill’s chief architect, criticized Democrats, saying they were not serious about consumer protection. Even so, several Democratic senators signaled negotiations are not over. Sen. Angela Alsobrooks said the bill was not dead, pointing to more than 70 million Americans engaging with the industry. Sens. Kirsten Gillibrand, Mark Warner, Cory Booker, Catherine Cortez Masto, Ruben Gallego and Raphael Warnock joined Alsobrooks in calling the vote a setback but not the end. Three people familiar with the discussions said early efforts have begun to restart talks, as lawmakers gauge whether bipartisan negotiations can resume. With legislation stalled, regulators are moving into the spotlight. Solana Policy Institute President Kristin Smith said the industry is now looking to regulators for clearer guidance. SEC Chairman Paul Atkins tied the agency’s latest innovation exemption to the Senate’s failure. The SEC released the measure Thursday, outlining a pathway for tokenized U.S. stocks to trade onchain. The CFTC also advanced its agenda, issuing a no-action position covering passive software providers. Separately, the agency sent a broader crypto markets rulemaking proposal to the White House for review, though details of the proposal have not been disclosed.