The crypto industry remains highly skeptical about Democrats' plans to restart talks over the stalled CLARITY Act, with pro-crypto analysts calling it 'all talk' with no action. As per AMBCrypto reports, Nate Geraci, a pro-crypto analyst, stated that Democrats are anti-crypto and may not change soon, noting there was no 'working in a bipartisan fashion' on crypto during the Biden administration. The skepticism follows Wednesday's statement from moderate Democrats, led by Kirsten Gillibrand and Ruben Gallego, who maintained they have worked for two years to pass the legislation and insisted they were committed to new bipartisan talks. According to AMBCrypto, the move followed a behind-the-scenes effort to reignite talks and fast-track the crypto legislation before the end of the year, though the bill failed with a 49-50 vote after Democrats blocked the procedural step needed to advance.
The Senate's 50-49 vote against invoking cloture on H.R. 3633 left the proposal 10 votes short of the 60 required to open formal debate, creating significant regulatory uncertainty for the crypto sector. GenLayer Labs CEO Albert Castellana told crypto.news that the result was disappointing because the proposal had been moving toward a principle he considers important: regulation should follow control. "Entities that hold customer funds, decide who may transact, or stand between two parties perform a different role from developers who publish software or users who join an open network," Castellana explained. Without clear rules, companies may respond by adding custodians, restricting access, or placing intermediaries between users and blockchain applications, potentially rebuilding many of the intermediaries crypto was supposed to eliminate.
There was less than 30% chance the bill can become law between now and 2028, according to industry assessments. StoneX analysts estimated that the Senate had about 14 working days available before election campaigning consumed the floor calendar, even if senators reach an agreement. Any new attempt would still require enough senators to assemble a 60-vote coalition, with the measure still needing to pass the chamber and complete the remaining legislative process. The bill's eventual form would depend on which party controls the next Congress, with Bergquist expecting no return before the midterm elections. Before the vote, Democrats submitted a counterproposal containing their preferred changes, while Republicans rejected the offer, with Gillibrand having identified ethics rules as a requirement for Democratic support, including restrictions on lawmakers issuing memecoins.
Bitcoin and Ethereum ETFs lost $591.8 million on September 15, posting their deepest single-day outflows in months as the CLARITY Act failed to advance in the US Senate. Bitcoin funds gave up $450.33 million, their worst session since June 25, with trading volume reaching $4.35 billion compared to a 30-day average of $2.74 billion. Ethereum ETFs recorded their largest daily outflow since January 30, losing $141.47 million after four straight weeks of inflows that totaled $1.94 billion over that period. The selling followed four straight weeks of inflows, with ETH products taking in $1.94 billion over that run, peaking at $824.4 million in late August. Despite the heavy outflows, both ETH and BTC ETFs still sit in positive territory for September, with Bitcoin funds holding a $17.1 million net gain month to date and Ethereum funds carrying $307.4 million.
Bitcoin was down 3% following the vote, while Coinbase shares were off 8% and Circle shares fell 10% as the broader market sold off. Reuters reported that bitcoin fell more than 5% as the vote appeared on track to fail, while shares of Coinbase and Circle fell as much as 10%. The market reaction reflects investor concerns about the continued regulatory uncertainty for digital assets. With Congress stalled, the SEC and CFTC are positioned to shape crypto policy under their existing authority, though agency action does not provide the statutory framework sought by the industry. Executives and analysts have said that only Congress can create a lasting regulatory structure, while regulations issued without legislation may be vulnerable to changing political conditions and court challenges. Bitcoin trades at $75,679, little changed since midnight UTC but 8% below its Sept. 4 high, with stellar down 9.6% and XRP 8.1% over 24 hours. The CoinDesk 20 Index also held its loss, dropping less than 0.1% since midnight after falling 4.6% on Tuesday in the steepest decline since June 5.
Coinbase CEO Brian Armstrong said after the vote that the industry 'can't wait on Congress anymore,'' arguing that the SEC and CFTC can use existing authority to establish digital asset rules. His comments followed a position he had taken before the vote, when negotiations over the legislation were still underway. Ripple CEO Brad Garlinghouse described the result as 'this one stings' and called on Atkins and Selig to 'fill the legislative gap.' Senate Banking Committee Chairman Tim Scott, one of the lawmakers behind the bill, took a similar position after midnight Wednesday, saying the SEC and CFTC should 'set clear rules of the road for digital assets until Congress legislates.' Sen. Cynthia Lummis of Wyoming blamed Senate Democrats for the result and argued they were not serious about passing market structure legislation, while Democrats disputed the Republican account of the negotiations. House Financial Services Committee Chairman French Hill and House Agriculture Committee Chairman Glenn Thompson said after the vote that only Congress could provide lasting statutory certainty, while supporting regulators' use of existing authority until lawmakers reach an agreement.
