Senate Blocks Crypto Clarity Act; XRP Plunges 11%, Bitcoin Falls 4.7%

Crypto assets tumbled Tuesday after the Senate failed to advance comprehensive market-structure legislation, with the vote on a motion to proceed falling 49-50 — short of the 60 needed to invoke cloture. The defeat effectively kills the bill for the current congressional session, with the midterm elections approaching.

XRP (CRYPTO:XRP) suffered the steepest decline among major tokens, plunging 11% in the 24 hours ending late Tuesday, according to data from CoinGecko cited by Nasdaq. Bitcoin (CRYPTO:BTC) fell 4.7% to $75,758.66, Ethereum (CRYPTO:ETH) dropped 7.6% to $2,398.80, and Solana (CRYPTO:SOL) lost 6.5% to $96.71. The total crypto market cap slid 3.7% to $2.68 trillion. Crypto-related equities also sold off: Coinbase and Circle Internet Group each fell about 9%, according to Reuters.

**The vote breakdown**

Tuesday's 2:15 p.m. ET vote was the first floor test of crypto market-structure legislation in the Senate, but it was not a final vote on the bill itself — it was a vote on whether to begin debate. The answer was no. Every Democrat voted against the measure, along with three Republicans: Sens. Susan Collins of Maine, Josh Hawley of Missouri, and Jerry Moran of Kansas, Zero Hedge reported. The bill, the Digital Asset Market Clarity Act, is the market-structure companion to the GENIUS Act stablecoin rules. It would have drawn jurisdictional lines between the Commodity Futures Trading Commission and the Securities and Exchange Commission for digital assets, created a federal registration regime for spot trading platforms, and set statutory terms for self-custody and noncustodial software.

**How the deal collapsed**

Senate Republicans released what they termed their "last, best and final" text Sunday night, according to Zero Hedge. The draft incorporated 126 substantive changes requested by Democrats, including new ethics language, edits to the Blockchain Regulatory Certainty Act, Agriculture Committee guardrails, and a Treasury "circuit breaker" to address bank concerns about stablecoin yield draining deposits. Democrats sent a counteroffer late Monday, demanding further concessions on ethics language, criminal-law scope for developer protections, and tighter exchange conflict-of-interest rules.

Senate Banking Committee spokesman Jeff Naft said in a statement: "In response to a significant step in their direction, Democrats have chosen to move the goalposts again. Yet we are hearing the same unreasonable asks and the same refusal to take yes for an answer. The final text is public." White House Crypto Council Executive Director Patrick Witt told Crypto In America on Monday that "if there are any changes, we're talking about punctuation at this point or technical changes," adding that he viewed the latest draft as "definitely a best and final offer," Zero Hedge reported.

**Three sticking points that sank the bill**

Zero Hedge detailed three unresolved fights. Ethics: Democrats wanted restrictions on large crypto holdings by the president, vice president, members of Congress, judges, and family, plus limits on paid promotions. Republicans added language they said tracked a Tillis-Gallego proposal, but critics argued it left gaps around existing ventures tied to the Trump family. Forbes reported that some Democrats argued the legislation "contains loopholes President Donald Trump and his family could take advantage of."

Developer protections and DeFi: The Blockchain Regulatory Certainty Act aimed to shield noncustodial software developers from money-transmitter registration. Sen. Catherine Cortez Masto of Nevada, a key Democratic negotiator, had pushed for narrower language. Republicans already stripped explicit criminal safe harbors, but her camp still wanted a sentence stating nothing in the bill changes criminal law — which industry and GOP negotiators called another goalpost move.

Banks and stablecoin yield: Eight banking trade groups, including the American Bankers Association and the Independent Community Bankers of America, attacked the proposed Treasury circuit breaker as "not a safeguard at all," arguing it would only fire after deposits had already left. They wanted tighter bans on interest-like payments on stablecoin balances.

The Democrats who had spent months negotiating the bill — Sens. Kirsten Gillibrand, Mark Warner, Cory Booker, Raphael Warnock, Ruben Gallego, Angela Alsobrooks, and Catherine Cortez Masto — all voted no, according to Crypto In America's Eleanor Terrett as cited by Zero Hedge.

**What’s next for crypto regulation**

The bill's failure leaves the U.S. crypto industry without a comprehensive federal framework. Both the SEC and CFTC are already preparing their own crypto asset guidance, reported Nasdaq, which could provide some regulatory clarity. Banks and institutions continue to integrate blockchain into their operations, and the setback is unlikely to reverse years of mainstream adoption, according to Nasdaq. However, crypto momentum — which had begun to pick up — may slow in the coming months, the report added.

For now, the legislative path is frozen. Republicans control 53 Senate seats, but Tuesday's vote showed they could not attract the seven Democrats needed to overcome a filibuster — and lost three of their own. With the midterm calendar running out, the Clarity Act appears dead for the remainder of 2026.