Get the best experience and stay connected to your community with our Spectrum News app. Learn More
Continue in Browser
Get hyperlocal forecasts, radar and weather alerts.
Please enter a valid zipcode.
Save
WASHINGTON, D.C. — Hopes of passing a new law this year to regulate cryptocurrency are fading as negotiations have stalled in the Senate along partisan lines.
Since President Donald Trump signed a law regulating stablecoins over the summer, momentum has been building to pass a law regulating all cryptocurrency. The fact that Senators are working on the legislation during the government shutdown underscores the urgency of regulating an industry that has exploded in size in recent years. The global value of the crypto market went from $192 billion in 2019 to $4 trillion in 2025, an increase of 1,983%.
The CLARITY Act would define how digital assets are classified and which agencies will regulate them. It would do that by reclassifying many kinds of cryptocurrency as commodities rather than securities. Rules for commodities, examples of which include oil, wheat or electricity, are generally looser than those for financial securities like stocks or bonds.
The bill would also determine whether digital assets fall under the jurisdiction of the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC).
Passed in the House in July, the bill remains stalled in the Senate.
Democrats want the legislation to protect consumers from fraud, prevent money laundering and keep public officials like President Trump from owning crypto-related companies.
“The crypto lobbyists are crawling all over Capitol Hill, and what are they looking for?” said Senate Banking Committee Ranking Member Elizabeth Warren, D-Mass. at a Senate Finance Committee hearing on Oct. 1. “To make it harder to track what’s happening in crypto transactions if they are being used for illegal purposes.”
Republicans, meanwhile, want to make sure the legislation does not slow down innovation in a fast-growing industry.
“The industry is pretty united. They want regulation, which is fantastic. The industry is crying for certainty, clarity to say, ‘Hey, what are the rules of the road?’” said Sen. Bernie Moreno, R-Ohio, who sits on the Senate Banking Committee.
Moreno, a longtime champion of the crypto industry, blamed Democrats for the delay in advancing the legislation.
A Sept. 30 markup date for the bill was pushed back because a group of 12 pro-crypto Democrats involved in the negotiations offered a counter proposal that included more restrictive regulations than what Republicans proposed, particularly for decentralized finance (DeFi), a peer-to-peer system that removes centralized institutions from crypto transactions.
“I think just quite frankly, it’s the temperature of what’s going on here in the Senate,” Moreno said. “[Democrats] just don’t want to do anything because they’re afraid that somebody on social media will say, ‘Why are you cooperating with the Republicans?’”
A spokesperson for Senate Banking Committee Chairman Tim Scott, R-Fl., wrote in a statement,
”In pursuit of a bipartisan market structure markup, Chairman Scott and Banking Committee Republicans delayed the September 30 markup to give Democrat colleagues additional time to come to the table and substantively engage on legislative text. Since June, the Committee has released principles, held a hearing, and published two discussion drafts–each reflecting feedback from members, industry, and regulators. Despite repeated requests for edits and redlines from Democrats, they have yet to provide formal feedback or agree to a markup date.
The Chairman remains optimistic that Democrats will return to the negotiating table, engage in good-faith efforts to finalize the text, and set a markup date as soon as possible to deliver the regulatory clarity America’s digital asset industry needs to thrive.”
The crypto industry spent $40 million in the 2024 Ohio Senate election to help unseat former Sen. Sherrod Brown, who chaired the Banking Committee and took a strong stance on regulating crypto.
The longer the legislation remains stalled, the higher chance the industry will spend heavily in next year’s Senate race, in which Brown is running again, this time to unseat Sen. Jon Husted, R-Ohio.
Negotiations stall on major crypto legislation – Spectrum News 1
