Crypto Industry Responds After Clarity Act Falls Short in Senate Vote

The Digital Asset Market Clarity Act failed to clear the U.S. Senate’s 60-vote threshold, creating another setback for efforts to establish a statutory framework for the country’s cryptocurrency markets.

The Senate’s failure to advance the legislation on Tuesday drew relatively restrained responses from crypto executives. While industry leaders described the result as disappointing, several noted that regulatory work at the Securities and Exchange Commission and Commodity Futures Trading Commission will continue independently of the vote.

The outcome also leaves unresolved a longer-term question about regulatory durability. Agency rules can be modified by future administrations, while legislation would establish requirements that generally cannot be changed without another act of Congress.

Some industry executives said the continued uncertainty could encourage companies to consider jurisdictions such as Europe, where the Markets in Crypto-Assets Regulation, or MiCA, has already established a regulatory framework. Others said the Senate vote does not materially change the broader movement toward regulated digital-asset markets.

Here are some of the reactions from crypto industry executives.

Brad Garlinghouse, Ripple CEO

Ripple CEO Brad Garlinghouse described the Senate result as a significant disappointment after the company and others in the industry had worked to advance the legislation.

Garlinghouse argued that the effort was intended to establish rules benefiting the broader industry and consumers while strengthening the U.S. position in financial technology.

He called for an examination of why the legislation failed and criticized Democratic opposition to the bill.

Garlinghouse also said there was still a basis for optimism, pointing to ongoing work at the SEC under Chair Paul Atkins and the CFTC under Chair Brian Selig. He said Ripple would remain involved in the agencies’ rulemaking efforts.

He added that Ripple’s business continues to see demand from traditional financial institutions and the digital asset sector, saying the Senate vote does not alter the company’s broader operations or international reach.

Connor Howe, Co-Founder and CEO of Enso

Connor Howe said the failed vote does not eliminate regulatory work already taking place at the agencies.

He pointed to CFTC Chair Selig’s direction to staff to develop a market structure framework under existing Commodity Exchange Act authority, as well as the SEC’s Regulation Crypto Assets proposal released for public comment in August.

According to Howe, the main significance of the Senate result is the issue of permanence. He noted that a future agency chair could rewrite an agency rule without requiring a Senate vote, while changing a statute would require another act of Congress.

Howe also highlighted the absence of explicit Section 1960 protections for developers who do not handle customer funds. Without those protections being established in legislation, he argued, they could be changed as easily as agency rules.

Alex Blume, Founder and CEO of Two Prime

Alex Blume said the failed vote effectively removes the near-term prospect of definitive federal crypto legislation.

He argued that continued delays in establishing rules could encourage businesses to develop in other jurisdictions and potentially contribute to offshore structures.

Blume pointed to the FTX collapse as an example of the challenges associated with offshore crypto businesses. He argued that the absence of clear U.S. rules contributed to conditions that allowed offshore structures to emerge, while clearer regulations could support legitimate businesses operating within the U.S. financial system.

He also said the breadth of the crypto industry makes regulation difficult, noting that the term encompasses everything from speculative tokens to global stablecoin systems.

Blume expects SEC and CFTC rulemaking to address some of the issues left open by the Clarity Act, including agency responsibilities and stablecoin treatment. However, he noted that regulatory measures would remain subject to future administrations.

Barnali Biswal, CEO of Hilbert Group

Barnali Biswal said the failed Senate vote should not necessarily produce a major market reaction because prediction markets had already reflected expectations that the legislation might fail.

She said the more significant consequence was the loss of legislative momentum.

Biswal also pointed to lobbying around stablecoin yield provisions before the vote, arguing that disagreements over those provisions remain unresolved. Without the compromise legislation, she said, institutional investors continue to operate in a market characterized by fragmented rules and enforcement uncertainty.

Strategy

Michael Saylor’s Strategy said in an X post that Bitcoin already has a degree of legal and regulatory recognition in the United States.

The company pointed to the CFTC’s longstanding classification of bitcoin as a commodity, the IRS treatment of bitcoin as property, the SEC’s approval of spot bitcoin products and the Financial Accounting Standards Board’s treatment of bitcoin as a GAAP asset.

Alan Konevsky, CEO of tZERO

tZERO CEO Alan Konevsky said the Senate result does not reverse the broader development of regulated digital asset markets.

He pointed to proposed rules from the SEC and CFTC and efforts by the agencies to coordinate their respective jurisdictions over digital assets.

Konevsky argued that institutional adoption will continue as financial institutions use regulated digital-asset infrastructure alongside or instead of traditional market systems.

Frederik Gregaard, CEO of the Cardano Foundation

Cardano Foundation CEO Frederik Gregaard contrasted the U.S. regulatory situation with Europe, where MiCA has been in effect since December 2024.

He said European companies have a defined regulatory framework while U.S. lawmakers continue to debate how to close the country’s regulatory gaps.

Gregaard argued that blockchain development will continue regardless of short-term market conditions and said the EU currently provides a clearer regulatory environment for builders.

Katherine Kirkpatrick Bos, Head of Legal at Chainlink Labs

Katherine Kirkpatrick Bos described the Senate result as disappointing and reiterated the industry’s demand for clearer regulation.

She said defined rules are important for consumer protection, institutional participation and U.S. leadership in financial markets.

Kirkpatrick Bos added that Chainlink Labs remains willing to work with lawmakers on legislation intended to provide a regulatory framework for digital-asset innovation.

Abhishek Vaidyanathan, Chief Legal Officer at NEAR

NEAR Chief Legal Officer Abhishek Vaidyanathan said the next Congress could represent the next opportunity to address crypto market structure if the Clarity Act fails to advance during the current session.

He pointed to the House’s cancellation of its weeks beginning Sept. 21 and Sept. 28 and the Senate’s state work period beginning Oct. 5, ahead of the Nov. 3 election.

Vaidyanathan argued that without legislation, crypto businesses would remain dependent on agency guidance and administrative decisions. He said that could create additional uncertainty for companies planning their 2027 budgets and require continued case-by-case legal analysis.

He also compared the U.S. framework with Europe, where MiCA has operated since December 2024. In his view, the absence of Clarity leaves the broader crypto market without the statutory foundation that the GENIUS Act established for stablecoins.

Vassilis Tziokas, VP of Growth at Matter Labs

Vassilis Tziokas said the Senate’s inability to advance the legislation changes the timetable for U.S. policymaking but does not alter the direction of development in banking.

He pointed to banks’ ongoing work on tokenized deposit networks, which allow institutions to move dollars onchain while keeping deposits on their own balance sheets under existing banking rules.

Tziokas said similar infrastructure is being developed for areas including intraday repo, collateral settlement and tokenized securities, with privacy requirements built into the systems.

He cited JPMorgan’s deposit token, Citi’s tokenized payment activity and initiatives by regional and community banks as examples of continued development. He also noted that Cari had raised more than $30 million with backing from banks to develop an institution-governed network.

With legislation stalled, Tziokas expects greater reliance on SEC and CFTC rulemaking and guidance from banking regulators in the interim. He also distinguished stablecoins from tokenized deposits, saying both could benefit from greater regulatory certainty.

Joshua Riezman, Chief Legal and Strategy Officer at GSR

GSR’s Joshua Riezman said the Senate’s inability to pass comprehensive market structure legislation shifts attention toward the SEC, CFTC and other regulators.

He said market participants will now look to those agencies for clearer rules and practical guidance.

Riezman also warned that continued delays could give other jurisdictions an opportunity to advance their digital-asset frameworks while the U.S. remains without comprehensive market structure legislation.

He maintained that the opportunity for U.S. leadership in digital assets remains, while emphasizing that regulatory developments elsewhere are continuing in the meantime.

The range of industry responses reflects several common themes: disappointment over the Senate vote, continued reliance on SEC and CFTC rulemaking, concerns about the durability of agency action and comparisons between the U.S. regulatory environment and frameworks such as Europe’s MiCA.

About The Author