The Clarity Act, which was expected to bring regulatory clarity to the U.S. virtual asset industry, failed to pass in the Senate. On September 15, the Senate held a procedural vote to begin deliberations on the bill, but it fell short with 49 votes in favor and 50 against, failing to secure the 60 votes needed for passage. As a result, the legislative process has effectively stalled without a final vote.
The Clarity Act aimed to categorize virtual assets as either securities or commodities and clarify the oversight roles of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). It also included provisions for mandatory registration of operators and anti-money laundering measures. This was the first attempt to incorporate the long-sought regulatory clarity into federal law, a demand from the U.S. virtual asset industry for several years.
However, the bill was hindered by conflicts of interest surrounding President Donald Trump and his family's involvement in the virtual asset business. The Trump family operates a virtual asset company, World Liberty Financial, and issues meme coins, directly participating in a business that could be affected by the president's policies. According to the Associated Press, the Trump family has reportedly earned over $500 million through World Liberty Financial. This creates a structure where the president promotes policies to foster the virtual asset market while simultaneously reaping significant financial benefits from it.
Democrats have called for strict limitations on virtual asset holdings and issuances by the president and other high-ranking officials. Although Republicans later added provisions to restrict digital asset issuances by federal officials, many believed these measures were insufficient to sever ties with the Trump family's existing business interests. Some Republican senators even voted against the bill. The moment the legislation, intended to establish industry rules, was perceived as a mechanism to protect the president's personal interests, the foundation for bipartisan support crumbled.
This defeat can largely be attributed to President Trump himself. He has positioned himself as the 'president of virtual assets,' declaring his intention to make the U.S. a global hub for virtual assets. However, if the president and his family are directly issuing coins and profiting from them, any regulatory relaxation will inevitably be viewed as serving private interests over public good. The more he pursued pro-industry policies, the more he should have separated his interests. It is contradictory to advocate for innovation while undermining market trust.
The repercussions extend beyond the U.S. Immediately following the bill's defeat, Bitcoin dropped more than 5%, with Ethereum and altcoins experiencing even steeper declines. Coinbase's stock also plummeted. Investors who had anticipated an influx of institutional investors and a revitalization of the altcoin market following the passage of the Clarity Act reacted with disappointment, leading to sell-offs. With the likelihood of legislative action within the year now uncertain, the U.S. virtual asset market has reverted to a state of uncertainty, once again dependent on the interpretations of the administration and regulatory bodies.
The domestic market is unlikely to remain unaffected. Regulatory clarity in the U.S. was one of the most anticipated institutional benefits for the stagnant domestic virtual asset market. With the bill's failure, investor sentiment in altcoins, which account for a significant portion of domestic trading, is likely to further decline, and trading volumes may continue to decrease. The decline in domestic stablecoin-related stocks prior to the vote reflects these concerns.
The South Korean government cannot afford to view this as someone else's problem. Discussions on a digital asset framework law, which will determine the issuance, distribution, and regulation of exchanges for virtual assets, are ongoing domestically, but key details have yet to be finalized. Delaying institutionalization citing the U.S. failure or neglecting safeguards in the rush to foster the industry is not an option. Reviving the market requires establishing rules that investors can trust and blocking conflicts of interest, rather than simply easing regulations. The failure of the Clarity Act leaves a clear lesson in its wake.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.