Crypto's flagship market-structure bill collapsed under politics, ethics fight and a rushed Senate timetable

The Senate's procedural vote on the Digital Asset Market Clarity Act earlier this month ended with bipartisan opposition, all but killing the crypto industry's top legislative priority for this Congress. Interviews conducted over the past 10 days with more than a dozen industry participants and legislative aides — several speaking on condition of anonymity — paint a picture of a bill that never had a realistic path, undermined by factors spanning policy, politics and timing.

The legislation was meant to draw clear jurisdictional lines between the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission over the roughly $3 trillion crypto market. Unlike last year's GENIUS Act, which set federal rules for stablecoins, the market-structure bill would have addressed the regulatory gray zone where crypto spot markets currently operate — the CFTC lacks spot-market authority beyond fraud and derivatives, the SEC never issued formal rulemakings for crypto securities, and no statute delineates where one agency's authority ends and the other's begins.

Ethics concerns hung over the bill from the start. Democrats have been alarmed since 2025 by President Donald Trump's personal crypto ventures, which include World Liberty Financial, the $TRUMP memecoin and mining firm American Bitcoin. In May 2025, Sen. Ruben Gallego and eight other Democrats said they would not back the GENIUS Act because of how Trump profited from the sector. That bill eventually passed with marginal changes, but the issue resurfaced with force after Trump's June financial disclosure revealed he made $1.4 billion from his crypto interests in his first year back in office — more than half of his $2.2 billion total income for 2025.

The ethics provision in the Clarity Act was drafted to apply broadly to all presidents and senior officials, but its clear target was Trump. Sen. Kirsten Gillibrand told attendees at CoinDesk's Consensus 2026 in May that the bill would not advance without such language. Sen. Angela Alsobrooks, who voted for the bill in the Senate Banking Committee, said she would not support further progress without additional work. Industry insiders expected a deal before the floor vote; Cody Carbone of the Digital Chamber told reporters in May that he expected a completed agreement before the bill reached the floor, because leadership would only bring it up if they were confident of 60 votes.

No deal emerged. Senate Republicans and the White House floated proposals, Democrats sent counteroffers, and Sens. Thom Tillis and Gallego pitched a bipartisan alternative, but none gained traction. Multiple sources told CoinDesk that Trump's disclosure handed Democrats an easy-to-grasp figure to rally around, and the issue only intensified as the midterms approached.

Rep. Ritchie Torres, speaking at CoinDesk's Policy & Regulation event last week, said that without Trump's memecoin, both parties could have gotten to yes. Stu Alderoty, chief legal officer at Ripple Labs, said politics had clearly trumped policy, adding that the industry needs to get better at politics. Ron Hammond of Wintermute noted that even sympathetic Democrats like Gillibrand, Gallego and Alsobrooks voted against the procedural motion, indicating how close the election loomed.

The industry's own lobbying effort also drew criticism. The Wall Street Journal reported last week that some insiders blame Coinbase and its CEO Brian Armstrong for the failure, after Armstrong publicly withdrew support for the Senate Banking Committee's version in January over its handling of stablecoin yield and rewards. That touched off a months-long fight between crypto and banking interests that consumed legislative bandwidth. Industry participants told CoinDesk they viewed the episode as harmful to the overall cause, though several also praised Coinbase's broader involvement. One lobbyist said an ethics proposal released in September might have found more fertile ground if it had come out in the spring.

Timing was a recurring theme. Alderoty said January offered an opportunity without the midterms looming. Charley Cooper, president and COO of Ava Labs, said the vote came less than two months before election day in a deeply polarized environment, making success unlikely. The Russia-Iran conflict, rising fuel prices and Trump's sliding poll numbers compounded the difficulty, as did progressive primary wins that made Democrats wary of handing the president a legislative victory.

The Senate's decision to write its own bill rather than take up the House-passed version — which cleared that chamber in July 2025 by a 294-134 vote, with 78 Democrats in favor — also drew sharp criticism. Wintermute's Hammond said the Senate's approach set Clarity up for an uphill fight, noting that many of the issues that bogged down the Senate bill were not on anyone's radar last year. The House's version and its predecessor, the Financial Innovation and Technology for the 21st Century Act, informed parts of the Senate text, according to House Financial Services Committee Chair French Hill. But even if the Senate had passed its bill, it would have had to return to the House, which recessed almost immediately after the Senate's return, leaving no time for a final vote.