The landmark legislation, known as the Clarity Act, stalled in the Senate as Democrats raised concerns about President Trump’s personal investments in crypto.
A sweeping bill that would create business-friendly rules for cryptocurrencies stalled in the Senate on Tuesday, a major blow to the crypto industry’s plans in Washington.
The Senate voted 50 to 49 to block consideration of the Clarity Act, a high-profile piece of legislation that was shaped by crypto executives over months of negotiations with Congress and the White House. The bill passed in the House last year, but it has faced numerous delays in the Senate.
The vote on Tuesday was a stinging defeat for the industry that makes it unlikely the legislation will pass anytime soon — if ever. With the midterm elections coming up in November, the window to advance it is closing rapidly, despite more than $100 million in political spending by crypto companies.
While many Republicans embraced the bill, Democrats largely opposed it. Many of their concerns centered on President Trump, who generated $1.4 billion from a network of crypto businesses last year. Democrats wanted stronger language to prevent the president and other public officials from using crypto to make money.
Ultimately, no Democrat voted for the bill, leaving Republicans well short of the 60-vote threshold required to proceed. Several Republicans, including Senator Susan Collins of Maine and Senator Josh Hawley of Missouri, also cast “no” votes.
“All President Trump wants is for the Senate to give him time to crime, and I won’t support any piece of legislation that enables him,” Senator Ruben Gallego, Democrat of Arizona, said in a statement after the vote. “This legislation failed squarely because Republicans refuse to say no to the president.”
The outcome was a bitter disappointment for crypto executives, who had made the Clarity Act their most important policy priority.
“Today’s vote was a failure of leadership,” Mason Lynaugh, executive director of the Stand With Crypto advocacy group, said in a statement. “Every day without action is a day that American innovation, jobs, and investments continue to be shipped overseas.”
Under the Biden administration, U.S. financial regulators cracked down on the crypto industry, filing lawsuits against top companies including Coinbase and Kraken. They argued that digital currencies were subject to the same strict rules as securities, like the stocks and bonds traded on Wall Street.
The industry was outraged and spent more than $130 million to fight back, funding a network of super PACs that helped elect pro-crypto legislators in the 2024 election.
When he took office, Mr. Trump ended the regulatory crackdown on crypto companies. But the industry wanted more — a bill that would enshrine his pro-industry position into law. If the Clarity Act had passed, crypto executives wouldn’t have had to worry about a future administration reviving the Biden administration’s aggressive legal strategy.
The bill passed the House with a bipartisan vote in July 2025. But the Senate has proved harder to navigate. For much of this year, the influential banking lobby argued that the bill would hurt banks by redirecting traditional deposits into crypto, causing concern among some Republicans.
But the focus of the recent debate has been Mr. Trump’s crypto profits. This week, Republicans released new language to address ethics concerns, including a provision that would bar federal officials from issuing or sponsoring digital coins. The new language also gave state attorneys general a role in enforcing the ethics rules — addressing a demand that Democrats made during a previous round of debate.
Democrats were not satisfied, arguing that the language was full of loopholes. Senator Richard Blumenthal, Democrat of Connecticut, called the rules a “charade” and a “sham.”
“The president’s latest attempt to write his own crypto ethics bill leaves wide loopholes, giving himself time to restructure his crypto venture companies so that he can continue to draw down unprecedented profits,” Virginia Canter of Democracy Defenders Action, an advocacy group, said in a statement.
The crypto industry still has major funds at its disposal. As of the beginning of August, a network of pro-crypto super PACs had about $123 million on hand, which it could spend to boost the industry’s favored candidates in the midterms or oppose crypto skeptics.
The industry has already secured major victories under Mr. Trump. Last year, Congress passed the Genius Act, creating industry-friendly rules for a type of cryptocurrency known as a stablecoin. And regulatory agencies like the Securities and Exchange Commission have adopted favorable policies toward crypto.
The vote on Tuesday was “a real setback, but it does not take away from all of the progress that has already been made under this pro-crypto administration,” said Joseph Chalom, the chief executive of the crypto firm Sharplink.
Michael Gold and Theodore Schleifer contributed reporting.