US Senate Defeats Crypto 'Clarity Act' Over Trump Conflict of Interest Concerns

The legislative push for the "Clarity Act," designed to establish a comprehensive regulatory framework for the U.S. cryptocurrency market, has collapsed in the Senate.

The U.S. Senate held a procedural vote to advance the Clarity Act, but it failed to secure the necessary votes with 49 in favor and 50 against, resulting in the bill's defeat, AP and Bloomberg reported on the 15th (local time).

Although the Republican Party holds a 53-seat majority in the Senate, advancing the bill required 60 or more votes, making cooperation from the Democratic Party essential. However, every single Democratic senator voted against it.

In addition, there were defections from Republican ranks, including Senators Susan Collins (Maine) and Josh Hawley (Missouri).

What stalled the Clarity Act were concerns over presidential conflicts of interest, notably that President Donald Trump and his family have been reaping massive profits through cryptocurrency businesses.

Senator Elizabeth Warren (Democrat-Massachusetts), ranking member of the Senate Banking Committee, argued in a speech prior to the vote, "Let's be clear: we should not pass a crypto bill that continues to allow President Trump to rake in billions of dollars in crypto profits while working-class families across the country struggle with rising prices."

Senator Mark Warner (Democrat-Virginia) also criticized the move, stating, "We cannot pass laws for this [crypto] industry while allowing the U.S. president to personally profit."

The Republican leadership attempted to appease Democrats by releasing an amendment that would restrict high-ranking officials, including President Trump, from issuing cryptocurrencies such as memecoins and grant state attorneys general enforcement powers. However, negotiations collapsed as Democrats demanded stricter enforcement mechanisms, such as mandating the liquidation of holdings if the president's volume reaches a certain level.

Senator Cory Booker (Democrat-New Jersey) emphasized to reporters, "It is not sufficient on the ethics front."

Senator Cynthia Lummis (Republican-Wyoming), who spearheaded the bill, drew a hard line on social media platform X (formerly Twitter), writing, "It is now or never for the Clarity Act" and "The time for negotiations is over," but she could not prevent its defeat.

Following the defeat of the Clarity Act legislation, prices of cryptocurrencies such as bitcoin and related stocks plummeted.

According to U.S. crypto exchange Coinbase, around 3 p.m. Eastern Time as news of the Senate vote broke, the price of bitcoin tumbled by more than 5% to $74,911, while ethereum, the second-largest cryptocurrency by market cap, plunged about 7% to $2,357 at the same time.

Coinbase stock closed the regular trading session down more than 10% from the previous trading day at $172.11.

Shares of Strategy, a company holding 845,000 bitcoins, also fell by more than 5% to $129.6.

Although the Clarity Act is a cryptocurrency regulation bill, it includes provisions clarifying the jurisdiction of cryptocurrencies that previously had ambiguous legal status, and it has been widely perceived as a major boon for the development of the crypto industry.

Considering that the U.S. Congress is scheduled to go into recess soon ahead of the November midterm elections, the failure of this vote has cast uncertainty over whether the Clarity Act can be processed within the year.
※ Please note: This article was translated by AI and may contain errors.