The cloture motion on the measure, H. R. 3633, was rejected 49-50, according to the Senate’s official roll call. Sixty votes were required to end debate on the motion to proceed. Republican senators Jerry Moran, Susan Collins, Josh Hawley and Thom Tillis voted against advancing the bill alongside Democrats, while Tillis changed his vote for procedural reasons that preserve the possibility of reconsideration.
The defeat leaves the legislation stalled as Congress approaches its pre-election recess and significantly narrows the time available for another attempt before the November midterm elections. The bill had become the crypto sector’s central legislative priority after years of lobbying for clearer rules governing which digital assets fall under securities or commodities law.
The proposed framework would have divided oversight between the Securities and Exchange Commission and the Commodity Futures Trading Commission, giving the CFTC a larger role over digital commodities while establishing registration and disclosure requirements for market participants. Supporters argued that legislation was necessary to replace regulation through enforcement with clearer statutory rules.
The House had passed an earlier version 294-134 in July 2025, with 78 Democrats joining Republicans, giving the industry an initial bipartisan victory that supporters hoped would translate into a Senate agreement after negotiations in Washington.
Senate Republicans released revised text before the vote after months of negotiations with Democrats and banking groups. Sponsors said the draft incorporated 126 substantive changes requested by Democrats, including tighter ethics restrictions on public officials, additional provisions addressing decentralised finance and changes intended to answer concerns about stablecoin rewards and bank deposits.
Those revisions failed to produce the bipartisan coalition needed for cloture. Democratic senators including Cory Booker and Adam Schiff said the measure still did not contain strong enough safeguards governing public officials’ crypto interests, illicit finance and sanctions evasion. Schiff said the bill met some goals on consumer protection and regulatory certainty but did not satisfy his concerns over ethics enforcement.
Republican sponsors rejected that criticism. Senate Banking Committee chairman Tim Scott said lawmakers had moved the legislation forward through extensive negotiations and called on the SEC and CFTC to use their existing powers to provide clearer digital-asset rules while Congress remains deadlocked.
The vote also exposed divisions within the Republican conference. Hawley had raised concerns over financial-sector provisions, while Collins and Moran joined him in opposing cloture. Tillis’s final no vote was procedural, allowing a senator on the prevailing side to seek reconsideration later.
The setback carries broader implications for financial firms that have been expanding crypto trading, custody, tokenisation and stablecoin services. Banks, exchanges and asset managers have increasingly sought rules that would reduce uncertainty around product classification, capital requirements and regulatory jurisdiction as digital assets move deeper into mainstream finance.
Banking groups, however, remained uneasy about provisions that could allow crypto companies to offer rewards on stablecoins. They argued that such incentives could draw deposits away from banks and constrain lending. Crypto advocates countered that restrictions on rewards would protect incumbent institutions and limit competition in digital payments.
Markets reacted sharply as the vote moved towards defeat. Bitcoin fell more than 5 per cent during the session, while shares of Coinbase and stablecoin issuer Circle dropped as much as 10 per cent. By Asian trading on Wednesday, bitcoin remained under pressure near $76,000, while several major tokens and crypto-linked equities were also lower.
Coinbase chief executive Brian Armstrong described the result as disappointing but said the SEC and CFTC still had authority to develop clearer rules. That route, however, would rely on agency rulemaking rather than legislation, leaving policies more exposed to changes in administration and potential court challenges.
Arabian Post – Crypto News Network
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