US Senate fails to advance CLARITY Act, industry shifts to SEC/CFTC rulemaking

The US Senate failed to advance the CLARITY Act—a proposed regulatory framework for digital assets—on Tuesday, falling 49-50 short of the 60 votes needed to invoke cloture. The bill’s advancement stalled, leaving crypto industry leaders to turn to potential rulemaking by the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) as the next avenue for regulatory clarity. While industry executives acknowledged disappointment, they emphasized ongoing engagement with agencies to address gaps in the absence of legislative action. Ripple CEO Brad Garlinghouse reiterated optimism, citing SEC Chair Gary Gensler’s and CFTC Chair Rostin Behnam’s commitments to issuing rules, though concerns persist over the temporary nature of such administrative solutions. Firms now face prolonged uncertainty in budgeting and operational planning, as repeated legal judgments and counterparty pricing adjustments become necessary until clearer rules emerge. The CLARITY Act’s prospects remain uncertain, with Senate Majority Leader Thom Tillis signaling a potential reconsideration of the cloture vote. However, industry observers, including NEAR’s Abhishek Vaidyanathan, caution that the next Congress—expected to convene in January 2025—may be the only viable path forward. Market expectations for legislative success have diminished, with odds of the bill being signed into law by 2026 dropping to 5%, the lowest since the market was established in January.