WASHINGTON, D.C. — The push in Washington to regulate cryptocurrency has hit a roadblock after lawmakers failed to advance the Clarity Act.
The Clarity Act fell short in a 49-50 procedural vote — despite months of bipartisan negotiations, intense industry lobbying and calls for a regulatory framework from crypto leaders.
“There are gaps in the law. We want to make sure that Congress has the time to close those gaps,” said Kristin Smith, CEO of the Solana Policy Institute, during an interview last month.
The Clarity Act was designed to establish a federal framework for digital assets — but the debate came down to one word: ethics.
“I voted no because the bill didn’t include the ethics language that we have asked for,” said Sen. Kirsten Gillibrand, D-N.Y., one of the leading crypto proponents among Democrats.
“This law is essential to protecting consumers, to making sure participants in the industry are all playing by the same rules,” Gillibrand said.
However, the New York Democrat added that more work needs to be done to prevent conflicts of interest.
“I think it’s essential that the American people know that members of Congress, people in the administration and senior top officials cannot be making money off digital assets. They shouldn’t be issuers. They shouldn’t be able to be promoters. They shouldn’t be able to get rich while serving off this industry,” said Gillibrand.
Gillibrand said negotiations will likely continue and that ethics provisions remain paramount.
“So we need the ethics provision. I’ve asked for us to continue negotiations to finish the underlying bill,” said Gillibrand. “I’m hopefully going to be able to speak to the administration directly about the ethics provision and why we need to have it so we can actually pass this law.”
“The failure to advance the Clarity Act yesterday cannot mean a continuation of regulatory uncertainty,” Sen. Dave McCormick, R-Pa., wrote on social media Wednesday. “Congress still has a responsibility to act. I’ll keep working to pass the Clarity Act to protect consumers and ensure our country leads the future of digital assets.”
For now, the Securities and Exchange Commission (SEC) will use its existing authority to keep an eye on crypto.
The Clarity Act remains stalled as the Senate scrambles to finalize a number of bills before they leave Washington for six weeks, starting in early October.
