Bitcoin, COIN, CRCL Under Pressure After CLARITY Act Vote Stalls: Here’s What Crypto Traders Are Watching

• The Senate failed to advance the CLARITY Act, as a 49-50 vote on Tuesday fell short of cloture. 
• Gemini co-founder Tyler Winklevoss said the crypto industry may now turn to regulators as a ‘Plan B’ for clearer rules. 
• Senate Banking Chair Tim Scott said the SEC and CFTC should set clearer digital asset rules while Congress continues working on legislation. 

The crypto market’s biggest legislative catalyst this year hit a procedural roadblock again. The Digital Asset Market Clarity Act (CLARITY Act) did not advance in the Senate on Tuesday, prompting crypto industry leaders to call on U.S. regulators to write rules for the sector, which Gemini co-founder Tyler Winklevoss has called a “Plan B”.

Senate Daily Press Gallery reported that the Senate rejected the motion to invoke cloture on the motion to proceed to the bill (49-50). The motion required 60 votes. The outcome came hours after crypto firms made a last-ditch effort for the bill. 

Winklevoss said the industry would now shift to "Plan B." In an X post, he directed his comments toward Securities and Exchange Commission (SEC) Chair Paul Atkins and Commodity Futures Trading Commission (CFTC) Chair Michael Selig, claiming the two would be "writing Clarity through rulemaking."

Chairman Paul Atkins pointed out the gap a day before. On Monday at the Solana Policy Institute summit in Washington, Atkins said that the SEC's proposed regulation of crypto assets would provide entrepreneurs the certainty to raise capital in this country if adopted. 

Feedback on the proposal kept coming back to one question, he said, "When does a covered investment contract cease to exist?" Atkin said that was one “critical reason” he was pushing Congress to move forward with the Clarity Act, adding that the bill addresses that challenge in the current law. If they adopt regulation of crypto assets, it's going to give entrepreneurs the certainty to raise capital in this country."

“Ultimately, the underlying principle behind Regulation Crypto Assets is to protect investors, while at the same time empowering entrepreneurs to continue contributing once their promised efforts are complete,” said Atkins.

Attention Shifts To SEC, CFTC Rulemaking 

Almost every Senate Republican, including Banking Chairman Tim Scott, (R-SC), voted to advance the bill. In a X post, he blamed Senate Democrats for the cloture motion's failure. Scott said that “We moved the ball forward," adding that the time has come for the SEC and CFTC to set clearer rules of the road for digital assets until Congress legislates.

Not all Republicans backed the motion, however. The vote was 49-50 with Senators Collins (R-ME), Josh Hawley (R-MO), Jerry Moran (R-KS), and Thom Tillis (R-NC) voting no, while Senator Rand Paul (R-KY) did not vote, according to the Senate Daily Press Gallery. The record showed Tillis voting no to reconsider the motion.

Senator Bernie Moreno (R-OH) took it a step further. He called the vote "a deliberate, calculated betrayal of American innovation." In a post on X, Moreno said the loss was engineered by Democrats led by Senator Elizabeth Warren (D-MA). 

Coinbase CEO: It Was "Best" That Clarity Did Not Pass

Among crypto's biggest supporters, Coinbase (COIN) CEO Brian Armstrong said that the CFTC and SEC have the tools to develop clearer rules under existing authority, adding that he expected them to get to work on this urgently. Armstrong added that “clarity is coming to crypto, regardless.” He also pointed to the GENIUS Act, which he said is already the law of the land for stablecoins. "The law is even more permissive on rewards," Armstrong said, adding that "some of the concessions Coinbase made on clarity were tough to swallow, so maybe it is for the best."

Retail Users Question: Why The Bill Failed

Following yesterday's failure of the CLARITY Act vote, COIN stock closed nearly 10% lower while CRCL stock closed 11% lower. 

On Stocktwits, COIN was one of the top trending tickers, as retail sentiment around it remained in the "bearish" zone. However, on Stocktwits, retail sentiment around CRCL improved to ‘bullish’ from the ‘bearish’ zone.

One retail user said that the CLARITY bill was supposed to give commodity treatment for crypto, CFTC licensing, and a token launch exemption, asking why it was “such a bad thing," pointing to the failed vote. 

This comes as the broader crypto market has been down, including Bitcoin’s price, which is down over 1%, trading around $75,731 at the time of writing.  On Stocktwits, retail sentiment around Bitcoin dropped to ‘bearish’ from the ‘extremely bearish’ zone over the past day.

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