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CLARITY Act founders at the Senate doorstep… “It’s not completely over” despite market shock
▲ Brad Garlinghouse, Ripple, XRP, Cryptocurrency Regulation, Virtual Assets/ChatGPT generated image ©
The US cryptocurrency market structure bill, the CLARITY Act, failed to pass its first procedural hurdle in the Senate plenary session, once again plunging the crypto industry into regulatory uncertainty. The market reacted immediately after the vote, with Circle's stock plummeting by over 11% and large market maker Wintermute closing some short positions. However, some members of both Democratic and Republican parties, along with industry representatives, have kept open the possibility of re-pursuing the bill, stating that the bill itself has not been abandoned.
According to cryptocurrency media outlet Coinness on the 16th, the cloture vote for the CLARITY Act in the US Senate plenary session failed to secure the necessary 60 affirmative votes, with more than 41 opposing votes. This vote was not to determine the final passage of the bill, but a procedural vote to advance the plenary session's deliberation. However, as the market had focused on it as a key piece of legislation for regulatory clarity, volatility in related assets and companies significantly expanded immediately after the rejection.
Market shock was immediate. Stablecoin issuer Circle (CRCL) plunged over 11% during trading due to the rejection of the CLARITY Act, trading at $87.04, down 10.78% as of 4 AM. Cryptocurrency market maker and trading firm Wintermute realized profits by closing some short positions after the vote failed. According to Onchain Lens, Wintermute's total short positions decreased from $102.1 million to $55.54 million, and unrealized profits increased from $928,000 to $2.28 million. Ethereum (ETH) short positions also decreased from 15,330 ETH, valued at $38.47 million, to 7,810 ETH, valued at $18.72 million.
The industry expressed regret and called for continued regulatory reform. Brad Garlinghouse, CEO of Ripple, stated that he was "very disappointed" by the vote result but remained optimistic about the future of the US cryptocurrency industry. He emphasized that the CLARITY Act was a bill for the industry, consumers, and US global competitiveness, not for specific companies, and predicted that the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) would continue to establish regulations to fill the legislative void. Ripple also stated its intention to actively participate in future regulatory processes.
In political circles, debates continued over who was responsible for the rejection, but the possibility of re-pursuing the bill was also raised simultaneously. Republican Senator Cynthia Lummis strongly criticized the Democrats, stating that they continuously presented new demands during the negotiation process. In contrast, Democratic Senator Angela Alsobrooks emphasized that "the bill will not be derailed," and that Congress has a responsibility to establish a regulatory framework, as over 70 million Americans participate in an unregulated industry. However, she criticized Republicans on the grounds that the accountability provisions for conflicts of interest between President Trump and the cryptocurrency industry were insufficient.
Even within the Republican party, there was an assessment that the CLARITY Act had not been completely abandoned. Senator John Kennedy stated that the rejection was not surprising, adding that the bill had not completely disappeared and mentioned the possibility of having to wait until the end-of-term congressional session. Senator Ted Cruz also expressed his hope that the bill would be revived. Ultimately, while this rejection has inevitably caused a setback in the schedule for US cryptocurrency market structure legislation, voices remain that the bill itself has not lost its vitality. For the time being, the market is expected to focus on whether the CLARITY Act will be renegotiated and what regulations the SEC and CFTC will use to fill the legislative void.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*
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