The CLARITY Act, which was designed to establish a comprehensive regulatory framework for cryptocurrencies and digital assets failed to secure a key procedural Senate vote, resulting in a sharp selloff in bitcoin linked stocks.
Shares of Coinbase Global and Circle Internet Group tumbled around 10% following the development. Despite heavy losses in crypto-linked stocks, expert believes the Senate vote for the CLARITY Act was not a major setback.
In an interaction NDTV Profit, Ajeet Khurana, Founder of Reflexical said, "CLARITY Act was to pass several times in the past. So when the first time it could not pass, it was a big blow. But when it happens, like for the fifth time, it is a setback, but not a very big one."
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Speaking on shares crashing, Khurana mentioned that the stocks also reflected the impact expected interest rate hike by the US Federal Reserve. While stock markets are sensitive to interest rate changes and liquidity conditions, crypto tends to be even more sensitive because of its smaller market size compared with equities, he noted.
"One was, of course, this vote because we wanted it to pass. The second was this upcoming interest rate hike because while stock markets are very sensitive to interest rate movements in hence the liquidity in the market, crypto is even more so because monopolist is a much smaller cap than the stocks are," Khurana said.
About CLARITY Act
The CLARITY Act was expected to establish clearer rules for crypto trading in the US, failed to advance in the Senate after securing 49 votes against the 60 needed on September 15. The bill had already cleared the House in July 2025, but faced opposition from some Democrats and a few Republicans, with critics raising concerns over rules governing the Trump family's crypto investments. The setback also sharply reduced expectations of the bill passing in 2026, with the odds falling from 75% to 10%.
Since Congress failed to advance the CLARITY Act, the Commodity Futures Trading Commission (CFTC) has decided to write its own crypto rules. The commission sent draft regulations to the White House on September 17, though the proposal is still at an early stage and is not yet a final, binding rule. If implemented, the rules would allow the CFTC to directly oversee crypto trading exchanges. Separately, the Securities and Exchange Commission (SEC) has given some platforms up to five years to trade stock-like crypto tokens. The White House review of the CFTC proposal could take 90–120 days.
What's next for crypto?
Without a proper law, crypto rules can change with every new government. This makes it riskier for big companies to build crypto businesses long-term. One senator warned Congress may not try this again until 2030, while experts say a final CFTC rule may not apply before late 2027. Traders are now watching if Senate brings this bill back before elections. Until then, expect crypto rules to keep coming from agencies, not Congress.
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