Senate fails the 60-vote threshold: Republicans sacrifice moral regulation to protect Trump's interests

According to Woofun AI, the US Senate's “Clarity Act” vote failed, mainly due to Republicans refusing to strengthen moral supervision to protect the interests of the Trump family. The bill, which aims to clarify the regulatory boundaries between the SEC and the US Commodity Futures Trading Commission, has run aground because it fails to touch the core of the conflict of interest.

The legislative impasse stemmed from multiple structural differences. The bill was intended to complement the Genius Act passed last year, which established a federal regulatory framework for US dollar stablecoins. However, the Democrats have no objection to market structure provisions, but they are adamantly opposed to exempting conflict of interest reviews. On the eve of the vote, the revised text submitted by the Republicans devolved enforcement powers to the state attorney general, and the federal level is still dominated by the US Department of Justice.

The arrangement has been widely interpreted as evading regulation of the presidential family's crypto assets — from which the Trump family made $1.4 billion last year. Arizona Senator Ruben Gallego pointed out to “TheHill” that the current code of ethics cannot bind the president who is responsible for regulation, and that the failure of the bill is the result of the Republican Party's unwillingness to disobey the president's wishes.

At the same time, opposition from the banking industry is equally strong. Lobbying groups warned that stablecoin interest payments permitted by the bill could trigger large-scale withdrawal of deposits from community banks. Data compiled by Woofun AI shows that this financial arbitrage risk has become a key variable hindering legislation. In the context of congressional stagnation, the SEC paved the way for tokenized stock trading, while the US Commodity Futures Trading Commission submitted separate cryptographic rule proposals to the White House, but neither is legally binding and faces potential litigation challenges.

The regulatory vacuum has prompted the industry to turn to political pressure. Cryptocurrency super political action committee Fairshake launched a $30 million campaign targeting Democrat Sherrod Brown, who is trying to regain Ohio's Senate seat a week after the Clarity Act failed.

The precise choice of this time point shows that the industry relies more on the political leverage of the midterm elections rather than waiting for a legislative breakthrough. Senator Tom Tillis changed his voting position, leaving a glimmer of hope for the bill to be reviewed again. However, the time window is extremely tight: the US Senate will adjourn on October 5, resume on November 9, and end the current Congress in early January. To push the bill through within a few weeks, the Republican Party must make three major compromises: abandoning moral enforcement mechanisms independent of the US Department of Justice, accepting strict restrictions on the presidential family's holdings in crypto projects, and reaching a stablecoin plan that satisfies community banks. Among them, the dispute between the Code of Ethics and stablecoins has been made public, which has become the final obstacle for legislation to break the situation.

The legislative process is in the countdown. As the midterm elections approach, political games will replace technical discussions as the dominant factor. If the Republican Party persists in protecting the interests of the president's family, it may be difficult to pass the bill before the beginning of January. This impasse not only reveals the fragility of the regulatory framework, but also indicates that future crypto policies will be subject to partisan exchange of interests for a long time.