XRP dropped nearly 10% to $1.30 Wednesday morning, leading a broad cryptocurrency sell-off after the U.S. Senate failed to advance the Clarity Act, a long-awaited crypto market structure bill.
The legislation was defeated in a 49-50 cloture vote, falling 11 votes short of the 60 needed to proceed. Multiple Republicans joined Democrats in opposing the measure, which had produced more than 600 pages of compromise text before unraveling over ethics provisions.
The breaking point was language designed to prevent senior government officials from retaining cryptocurrency business interests. Senator Elissa Slotkin, Democrat of Michigan, said she voted no because the ethics safeguards were "simply too thin," pointing to President Donald Trump, his children, and members of his Cabinet who have earned income from crypto. She also cited insufficient Commodity Futures Trading Commission staffing to implement the law and gaps in provisions addressing money laundering and terrorist financing.
"The ethics provisions in this bill are simply too thin. President Trump, his children, and his Cabinet are making billions of dollars in the crypto space," Slotkin wrote on social media.
Beyond XRP, Ether fell nearly 5% to about $2,410, Solana dropped 5% to just above $97, and Dogecoin declined nearly 5%. Zcash and Hyperliquid's HYPE each fell close to 4%, while Bitcoin slipped nearly 3% to just above $76,000. BNB and Tron were the mildest performers, each down about 1%.
Crypto equities suffered steeper losses than major tokens. Coinbase fell nearly 9% to $174.42 and Circle dropped more than 9% to $88.26. Galaxy Digital declined 8%, Gemini fell 7%, and Bullish and Riot Platforms each lost 5%. eToro dropped 4%, while Robinhood, MARA Holdings, CleanSpark, IREN, and Core Scientific fell between 3% and 4%.
With congressional action stalled, attention shifts to regulators the bill was meant to constrain. The Securities and Exchange Commission is already developing its proposed Reg Crypto framework and rules for tokenized securities, which industry advocates say is now the only remaining path to the legal certainty the sector sought from Congress. Political action committees within the industry, including Fairshake, must now decide how to treat senators who voted against the bill ahead of the Nov. 3 election and before a new Congress convenes in January 2027.
Adding to market uncertainty, the Federal Reserve is set to announce its interest-rate decision later Wednesday, with traders pricing in a quarter-point hike on a market that has already sold off risk assets following the legislative collapse.
