The Senate passed a resolution Tuesday blocking the Transparency Act, dealing a major blow to the crypto industry’s push for a comprehensive market structure framework.
The procedural vote leaves the bill stalled on Capitol Hill after months of negotiations aimed at building bipartisan support. Republican leaders had announced a revised version of the bill on Sunday that added new ethics restrictions to address Democratic concerns about public officials profiting from cryptocurrency ventures. However, these changes were not sufficient to resolve remaining objections.
The vote was a stunning defeat for the crypto industry, which had exuded confidence that enough senators would vote to advance the bill. Ahead of the vote, Democrats expressed frustration that Republican negotiators had not responded to ethics demands to address the profits made by President Donald Trump and his family from cryptocurrency ventures.
“The compromise that we came up with was a good ethical compromise and would have gotten a lot of Democratic votes,” Sen. Ruben Gallego (D-Ariz.), the lead Democratic negotiator, said before the vote. Gallego accuses Republicans of being “more concerned with making sure the president continues to make money than actually putting regulations in place” and thereby “causing the entire system to fail.”
price of Bitcoin Last time it was down 3%. coinbase and circle Stocks fell 8% and 10%, respectively, as the broader market declined.
The motion to proceed received 50 votes in favor and 49 votes against, well below the 60 votes needed to clear the procedural hurdles.
crypto framework
The bill would establish a framework for virtual currencies, split oversight between the Securities and Exchange Commission and the Commodity Futures Trading Commission, establish registration requirements, and strengthen protections against money laundering.
For the crypto industry, the significance of Tuesday’s vote was whether the bill could advance to the Senate for debate and consideration. Even if successful, it would have to pass the House of Representatives before reaching President Trump’s desk, with further negotiations and votes in the Senate.
Business owners and investors say the legislation would provide certainty and help attract long-term capital, but many in the industry accept that regulatory momentum may need to be built outside Congress. For example, the SEC has proposed allowing startups to sell up to $75 million in tokens without registration, and the CFTC recently approved the first Bitcoin perpetual futures in the United States.
A failed vote will likely mean the crypto industry will have to wait until next year to establish clearer rules. Sen. Cynthia Lummis (R-Wyo.), a top crypto industry champion in the Senate, told reporters early Tuesday that if the Clarity Act’s procedural vote fails, “it’s over.”
Additionally, the midterm elections are scheduled to take place in seven weeks, making the bill’s consideration once again difficult. The senators plan to leave Washington in early October and not return until after the election. The House will adjourn even earlier and head out of town this weekend. Members, especially those in close races, are eager to return to their home states and participate in campaign activities.
Tuesday’s vote could pave the way for FairShake, a cryptocurrency political action committee, to donate to candidates running against senators who voted to block the Clarity Act.
