Trump regulators eye crypto after Clarity Act impasse

A cryptocurrency regulation bill appears to have little momentum left in the Senate after it came up short in a floor vote Tuesday, with industry now turning its attention to Trump regulators to set the rules of the road.

The Clarity Act failed to secure enough support to clear a procedural hurdle Tuesday afternoon, with every Democrat and several Republicans voting against the effort to advance the bill.

It was a stinging loss for an industry that has poured extensive resources into lobbying Congress for the legislation over the past two years, as well as the GOP lawmakers and administration officials that championed the push.

But crypto leaders are quickly shifting their hopes to a pair of financial regulators in the Trump administration: the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).

“The Senate has voted and we have a different type of clarity. It’s time for agencies to step forward and for crypto voters to make their voice heard,” Faryar Shirzad, Coinbase’s chief policy officer, wrote in a post Tuesday on the social platform X.

Support for the Clarity Act crumbled after crypto-friendly Democrats and Republicans failed to reach an agreement on ethics language ahead of Tuesday’s vote.

Ethics were a longtime concern for Democrats, who voiced worries about passing legislation that could potentially boost President Trump and his family’s crypto businesses.

Senate Republicans put forward what an aide described as their “last, best and final offer” on Sunday with a new White House-backed ethics provision.

But Democrats indicated Monday the updated language still fell short, with Sen. Raphael Warnock (D-Ga.) telling reporters there were “a whole lot of loopholes.”

Talks continued up until Tuesday’s vote, in which Democrats ultimately blocked the legislation. They were joined by four Republicans — Sens. Susan Collins (Maine), Josh Hawley (Mo.), Jerry Moran (Kan.) and Thom Tillis (N.C.).

Welcome to The Hill’s Technology newsletter , we’re Julia Shapero and Miranda Nazzaro — tracking the latest moves from Capitol Hill to Silicon Valley.

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SEC unveils exemption for tokenized stock trading

The Securities and Exchange Commission (SEC) unveiled its long-awaited “innovation exemption” Thursday, a new order aimed at clearing the way for tokenized stock trading in the U.S.

The order creates a pair of five-year exemptions. The first exempts platforms that host tokenized stock trading from the commission’s definition of an exchange, while the second exempts liquidity providers in the space from its definition of a dealer.

“Over the past several years, advancements in distributed ledger technology have facilitated innovations in trading across non-security crypto assets,” the SEC noted in a fact sheet.

However, it suggested that tokenized stock trading platforms “may face substantial challenges with complying with the Federal securities laws without potentially burdensome changes to its business model.”

Tokenized stocks are digital versions of real-world stocks . They are represented by digital tokens on the blockchain, the technology that forms the foundation of cryptocurrency.

Check out a full report at T heHill.com.

Crypto Corner is a daily feature focused on digital currency and its outlook in Washington.

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