CLARITY Act Stays Dead in the Senate as Agencies Push Crypto Rules Forward Without It

Since the Senate's 49-50 cloture vote failed on September 15, the Digital Asset Market Clarity Act has gone nowhere in the chamber, but Washington hasn't stopped moving on crypto. The Securities and Exchange Commission, the Commodity Futures Trading Commission and the Federal Reserve are all pressing ahead on their own authority, and a rewrite of the bill is taking shape for when the Senate returns Monday, October 5.

The math on September 15 was simple and brutal. The bill needed 60 votes to break a filibuster. It got 49, with Sen. Thom Tillis (R-N.C.) switching his vote to "nay" at the last moment, according to the Epoch Times. It didn't even clear a simple majority.

The bill itself, H.R. 3633, passed the House in July 2025 and cleared the Senate Banking Committee in May 2026, according to the Epoch Times. It would split regulatory oversight of digital assets between the SEC and CFTC, something TechTarget reported both parties broadly agreed on. What sank it was everything else attached to it.

Trump's crypto business became the sticking point

Senate Democrats, led by Sen. Elizabeth Warren (D-Mass.), said the bill's ethics language didn't go far enough to stop public officials from profiting off crypto while they write the rules for it. "This crypto bill says, 'Have at it, Mr. President,'" Warren told CNN. "We need crypto regulation, and part of it should be to say that no one around here who has something to do with setting crypto policy can buy, sell or trade crypto."

CNN reported Trump has earned more than $1 billion from crypto ventures he and his sons launched shortly before his second inauguration. Crypto Ticker put the figure higher, reporting Trump's crypto business earned more than $1.2 billion last year. Neither figure has been independently audited in the sources reviewed for this story.

Republicans say they moved. The final Senate text added language barring public officials from issuing or sponsoring digital assets, enforceable by the Justice Department or state attorneys general, according to Breitbart. Sen. Cynthia Lummis (R-Wyo.) said Trump "voluntarily agreed to unprecedented ethics restrictions" and that the bill reflected more than 100 concessions to Democrats across its 630 pages. Senate Majority Leader John Thune put it bluntly after the vote: "I don't think you ever go far enough for the Democrats."

Democrats weren't satisfied. Sen. Chris Van Hollen (D-Md.) called the bill "masquerading as a way to create good regulation" that "does nothing to stop Trump's crypto corruption or the use of crypto by bad actors," posting on X before the vote. Sen. Ruben Gallego (D-Ariz.), a lead negotiator, accused Republicans of cutting off talks to force a vote rather than building a bill that could actually get 60. Whether the ethics provisions in the bill were adequate is a judgment call the Senate itself couldn't agree on, and neither side's claim has been independently adjudicated.

Banks had their own objection, warning that stablecoin interest-style payouts could pull deposits out of traditional accounts and into higher-yield crypto products. Both the Epoch Times and TechTarget confirmed this concern shaped the final text.

Markets reacted immediately, then moved on

Bitcoin briefly dropped below $75,000 on the day of the vote, Coinbase shares fell around 8% and Circle fell around 10%, according to Crypto Ticker. Those are price moves tied to a specific event by that reporting, not a claim about what any individual investor actually lost.

Regulators aren't waiting around

With the bill stuck, agencies have kept legislating by rulemaking. The Federal Reserve issued a proposal on September 24 requiring reserve-backed support for payment stablecoins under the GENIUS Act, which became law in 2025, specifying that acceptable backing includes short-term Treasuries and other high-quality liquid assets, according to the Bitcoin Foundation. The Fed's second proposal would set up an application process for bank holding companies that want subsidiaries to issue payment stablecoins.

Separately, the SEC has moved forward with an Innovation Exemption for tokenized stocks and approved a tokenized securities proposal, according to Crypto Briefing, which described the overall trend as agency rulemaking filling the gap Congress left open.

A September 30 Congressional Research Service report found the Senate version of CLARITY would open up 11 digital-asset activities to banks and credit unions, including underwriting and trading a broader range of digital assets than currently allowed, according to the Bitcoin Foundation. That's notably more permissive than the House-passed version, which mostly lets banks apply blockchain technology to existing activities.

Banking concerns and structural risks

Banking industry groups and a number of state attorneys general raised a structural concern: unchecked stablecoin rewards could function like bank interest in disguise, drawing deposits out of the regulated banking system and into less transparent crypto products, with ripple effects on lending capacity. The Senate's final text added Treasury authority aimed specifically at deposit flight, according to TechTarget, without fully resolving it.

What happens next

Sen. Tillis filed a motion to reconsider, keeping a procedural path open, and Lummis has already published updated substitute text built from Senate Banking and Agriculture committee work as the starting point for what Crypto Ticker is calling "CLARITY Act 2.0." The Senate's next work period runs from Monday, October 5 through November 6, overlapping with the midterm campaign, and fewer than 36 legislative days remain before a new Congress is sworn in in January 2027. Felix Shipkevich, a fintech regulatory attorney at Hofstra Law, told TechTarget he wouldn't be surprised if lawmakers wait until after the elections to try another vote. Whether Senate Republicans can find seven Democratic votes before then, or whether the SEC and CFTC's rulemaking simply becomes the de facto regulatory framework by default, remains an open question.