US Cryptocurrency Bill Collapses in Senate Amid Fight Over Trump’s Crypto Empire

A push for landmark US cryptocurrency legislation collapsed in the Senate on Tuesday after Republicans and Democrats failed to bridge differences over ethics, banking and how the fast-growing digital asset industry should be regulated, dealing a significant setback to one of Washington’s most closely watched legislative efforts of the year.

The Digital Asset Market Clarity Act failed to secure the 60 votes needed to advance to debate on the Senate floor, with safeguards governing President Donald Trump’s extensive crypto interests standing as one of the biggest obstacles to a deal. Massachusetts Senator Elizabeth Warren, the top Democrat on the Senate banking committee, said the bill posed “massive risks to families, our national security, and our economy.” She added, “And if that’s not bad enough, while Americans across the country suffer from an affordability crisis, this bill will turbocharge President Donald Trump’s ability to rake in billions and billions of dollars from crypto.” Her remarks reflected the broader Democratic position that the bill’s ethics provisions, however improved from earlier drafts, still fell short of what was needed given the scale of the president’s personal financial stake in the industry the legislation was meant to regulate.

The defeat dealt a major blow to efforts to establish the first comprehensive federal framework for digital-asset markets, offering another illustration of Congress’s struggle to keep pace with disruptive new technologies as lawmakers separately wrestle with a similarly fraught debate over artificial intelligence. The more than 600-page legislation would have divided regulatory oversight largely between the Securities and Exchange Commission and the Commodity Futures Trading Commission, replacing a regulatory patchwork that has shifted unpredictably between administrations over the past several years and left both investors and crypto companies operating without consistent, long-term rules. A version of the bill passed the House last year, and the Senate committee advanced the measure on a bipartisan vote in May, giving supporters early hope that a final deal was within reach well before the current legislative session wound down. But months of subsequent negotiations failed to produce a compromise capable of surviving the Senate floor, despite heavy lobbying from the crypto industry and a frantic final effort by Republicans to rewrite parts of the legislation in the bill’s closing days.

At the center of the dispute was Trump and his family’s financial stake in the crypto industry, an issue that had shadowed the bill’s negotiations for much of the year. Trump and his family earned more than $1 billion from crypto ventures last year, according to financial disclosures, putting the president’s business interests directly at the center of Democratic objections to the bill. Republicans made late changes intended to strengthen ethics provisions, including restrictions on elected officials issuing cryptocurrencies, requirements covering some crypto holdings, and greater enforcement powers for state attorneys general, changes aimed specifically at addressing concerns that the legislation as originally written offered too few safeguards against conflicts of interest. Wyoming Senator Cynthia Lummis, one of the legislation’s leading Republican architects, said the final text incorporated more than 120 changes sought by Democrats over the course of negotiations. “A no vote on Tuesday means opposing real ethics reforms on politicians’ personal investments, handing American leadership in digital assets to our foreign competitors, and leaving Americans with zero protections in the digital asset markets,” she said ahead of the vote, framing the bill’s failure as a missed opportunity rather than a principled rejection.

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Democrats countered that the provisions still contained loopholes and left too much enforcement authority in the hands of officials appointed by Trump himself, a structural concern that ultimately proved difficult to resolve through incremental amendments alone. Community banks also fiercely opposed provisions in the bill allowing rewards on stablecoin holdings, arguing they could pull deposits out of traditional lenders and reduce funding available for farmers and small businesses across the country, a concern that found sympathy among lawmakers representing more rural and agricultural districts. Several Republican senators separately expressed concern about those specific provisions, further complicating party leaders’ efforts to muster sufficient support for the bill in its final days, and illustrating how the coalition needed to pass the legislation extended well beyond a simple party-line divide.

The crypto industry’s failure to secure legislation came despite years of negotiations, intense lobbying and hundreds of millions of dollars in political spending aimed at building support for a comprehensive federal framework, making Tuesday’s outcome a particularly stinging defeat for an industry that had invested heavily in cultivating relationships on both sides of the aisle. Supporters had argued that permanent legislation was needed to give businesses and consumers clear rules rather than leaving regulation dependent largely on shifting decisions by federal agencies that can change direction entirely with each new administration. The White House had strongly backed the bill, framing cryptocurrency as an international technology race in which the United States risks losing ground to competitors, a framing Republicans leaned on heavily throughout the debate. With the November 3 midterm elections approaching and little time remaining on the congressional calendar, Tuesday’s defeat could effectively shelve the effort until a new Congress convenes, likely delaying comprehensive crypto regulation for at least another year or more, and leaving the industry to continue operating under the same fragmented regulatory patchwork it had spent years lobbying to replace.

The bill’s collapse also comes as Congress confronts an even more complex, parallel struggle over artificial intelligence regulation. Leading AI executives and researchers have issued increasingly stark warnings about the potential dangers of powerful AI systems in recent weeks, prompting calls from lawmakers in both parties for new safeguards. Yet Washington remains deeply divided over whether regulation is urgently needed or could instead slow US innovation and hand an advantage to China, a tension that mirrors much of the debate that ultimately sank the crypto bill. Crypto has been under sustained congressional scrutiny for years and benefits from a mature, well-funded industry pushing for agreed-upon rules, and its failure to get a landmark bill through the Senate highlights the broader challenge facing lawmakers as they turn their attention to technologies evolving considerably faster than crypto ever did, raising real questions about whether Washington’s legislative process can keep pace with any of it.

Markets reacted immediately to the news. Bitcoin, the world’s biggest cryptocurrency by market value, dropped sharply following the bill’s collapse, losing around five percent to trade at $75,039 on Tuesday, reflecting investor disappointment over the loss of regulatory clarity the industry had been pushing for throughout the year and uncertainty over how long that clarity might now remain out of reach.