The Senate rejected the CLARITY Act on Tuesday in a 49-50 vote, falling short of the 60 votes needed for passage. The bill would have codified cryptocurrency market rules into federal law.
Despite the legislative setback, Ripple and MicroStrategy told investors that the legal standing for their respective assets remained unchanged.
Existing Legal Framework
Stuart Alderoty, Ripple's chief legal officer, pointed to two prior developments supporting XRP's position. A 2023 federal court ruling determined that XRP sales on exchanges did not constitute securities transactions, though the same judge found that Ripple's institutional sales violated securities law. Additionally, in March, the Securities and Exchange Commission and the Commodity Futures Trading Commission jointly issued an interpretation designating XRP as a digital commodity alongside 15 other assets.
"Don't forget – Ripple and XRP stand on settled ground. The 2023 federal Court ruling established XRP is not a security. And in March the SEC and CFTC issued a joint interpretation naming XRP a digital commodity," Alderoty wrote on X.
MicroStrategy, which holds 845,050 Bitcoin purchased for $63.73 billion, made a parallel argument for Bitcoin. The firm stated that "Bitcoin has had legal and regulatory clarity in the U.S. for years."
Legislative Collapse
The House passed the CLARITY Act with bipartisan support in July 2025, with 294 votes in favor and 78 Democrats backing the measure. Senate Democrats' opposition to the bill grew substantially in the intervening months.
Representative Tom Emmer, the House majority whip, publicly criticized Senator Kirsten Gillibrand after she voted against the bill, noting that she had expressed support for the industry at a March panel discussion.
Prior to the vote, 18 state attorneys general had urged Congress to reject the legislation.
Industry Response
Industry observers expressed varied reactions. Chainlink noted that continued regulatory uncertainty could push developers to other jurisdictions. Grayscale stated that the industry continues making progress through existing regulatory efforts by the SEC and CFTC. Ripple CEO Brad Garlinghouse framed the defeat as a failure of political will, stating that "the politics of the democrats was elevated over good policy."
