The U.S. Senate has blocked consideration of a legislation that would establish business-friendly rules for cryptocurrencies, dealing a major setback to an industry that has made the bill a top priority in Washington.
The Senate voted 50-49 against advancing the Clarity Act, falling short of the 60 votes needed to overcome procedural hurdles. The legislation, which was shaped through months of negotiations between crypto executives, lawmakers and the White House, passed the House of Representatives in July 2025.
The vote makes passage before November’s midterm elections more difficult, narrowing the industry’s window to secure legislation despite more than $100 million in political spending by crypto companies and their allies.
Democrats largely opposed the bill, citing concerns about President Donald Trump’s personal financial interests in cryptocurrency and arguing that it did not contain sufficient safeguards against public officials profiting from digital assets.
No Democrat voted to advance the legislation. Several Republicans, including Senators Susan Collins of Maine and Josh Hawley of Missouri, also voted against it.
“All President Trump wants is for the Senate to give him time to crime, and I won’t support any piece of legislation that enables him,” Senator Ruben Gallego, Democrat of Arizona, said in a statement after the vote. “This legislation failed squarely because Republicans refuse to say no to the president.”
The vote was a setback for crypto executives, who have identified the Clarity Act as their most important legislative priority.
“Today’s vote was a failure of leadership,” Mason Lynaugh, executive director of the Stand With Crypto advocacy group, said in a statement. “Every day without action is a day that American innovation, jobs, and investments continue to be shipped overseas.”
The cryptocurrency industry faced a tougher regulatory environment under Democratic former President Joe Biden, when U.S. financial regulators brought enforcement actions against major crypto companies including Coinbase and Kraken.
Regulators argued that many digital assets fell under existing securities laws, subjecting them to rules governing traditional financial instruments such as stocks and bonds.
The industry responded by spending more than $130 million on political efforts, including through super PACs that supported crypto-friendly candidates in the 2024 election.
Trump, who returned to office in January, moved to reverse many of the Biden administration’s crypto policies and has promoted the United States as a global center for digital assets.
The industry has nevertheless sought legislation that would codify a more favorable regulatory framework, reducing the risk that a future administration could restore tougher enforcement policies.
The House passed the Clarity Act with bipartisan support in July 2025, but the legislation encountered resistance in the Senate.
Earlier this year, the banking industry warned that the legislation could encourage consumers to shift traditional bank deposits into crypto products, prompting concerns among some Republicans.
More recently, the debate has focused on Trump’s cryptocurrency interests.
Republicans this week proposed new provisions intended to address ethics concerns, including a measure that would bar federal officials from issuing or sponsoring digital coins. The language would also give state attorneys general a role in enforcing the ethics provisions, responding to a demand Democrats had made during an earlier round of negotiations.
Democrats rejected the changes, saying they contained loopholes that would not adequately prevent Trump and other officials from profiting from cryptocurrency.
Senator Richard Blumenthal, Democrat of Connecticut, described the proposed ethics provisions as a “charade” and a “sham.”
“The president’s latest attempt to write his own crypto ethics bill leaves wide loopholes, giving himself time to restructure his crypto venture companies so that he can continue to draw down unprecedented profits,” Virginia Canter of Democracy Defenders Action, an advocacy group, said in a statement.
Trump’s crypto ventures generated $1.4 billion last year, according to the article’s source material, intensifying scrutiny from Democrats over potential conflicts of interest.
The crypto industry’s political spending capacity remains substantial. As of early August, a network of pro-crypto super PACs had about $123 million available, funds that could be used to support industry-friendly candidates or oppose lawmakers viewed as hostile to cryptocurrency in the November midterm elections.
The industry has already achieved several legislative and regulatory gains under Trump.
Congress passed the GENIUS Act last year, establishing a federal framework for stablecoins, a category of cryptocurrency designed to maintain a stable value, typically by being backed by assets such as U.S. dollars or government securities.
Regulators including the Securities and Exchange Commission have also adopted policies viewed favorably by the crypto industry.
The Senate vote was “a real setback, but it does not take away from all of the progress that has already been made under this pro-crypto administration,” said Joseph Chalom, chief executive of crypto firm Sharplink.
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Mohd Hassan has extensive experience in news gathering, editing, and writing for the newswire industry, Contact – Info@impactnews-wire.com
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