Senate blocks cryptocurrency regulation as Democrats push back on Trump
investments
[September 16, 2026]
By MARY CLARE JALONICK
WASHINGTON (AP) — Senate Democrats on Tuesday blocked legislation to
create a new regulatory framework for cryptocurrency, stalling an
industry-backed effort to place new guardrails around digital assets
after demanding more limits on President Donald Trump's investments.
The 49-50 vote on whether to move forward with the legislation was a
pivotal election-year test for the $2.3 trillion cryptocurrency market
as the industry has pushed aggressively for a uniform set of rules. The
Senate debate came as cryptocurrency companies have become a major
political force, and as Trump has amassed significant wealth in crypto
while in office.
While some Democrats are friendly toward the industry and support the
idea of regulation, they have been adamant that the bill include strong
ethics safeguards to prevent the president and his family from enriching
themselves while he's in office. The opposition appears to have only
solidified two months before the midterm elections, despite significant
donations that crypto groups have given to some Democrats in recent
years. In the end, no Democrats supported it.
“Let’s make sure that we do not pass a crypto bill that will let Donald
Trump continue to rake in billions of dollars in crypto profits while
working families across this country struggle to deal with higher prices
and an economy that gets worse by the day,” said Massachusetts Sen.
Elizabeth Warren, the top Democrat on the Senate Banking Committee.
Several Democrats who have been supportive of the bill aside from the
ethics concerns said they were still open to negotiating.
Virginia Sen. Mark Warner said he still wants regulation of the crypto
industry, but “we cannot pass landmark legislation governing this
industry while allowing the president of the United States to personally
profit from it.”
The White House indicated Tuesday that it would now turn to agencies to
implement parts of their crypto agenda and warned that the failed vote
would continue to stifle financial innovation domestically while it
flourishes abroad.
“The full cost of today’s result may not be known for years to come, but
this much is clear: It increases the risk that the standards that global
financial markets adhere to in the future will be those of Brussels or
Beijing, rather than Washington and New York,” Patrick Witt, the White
House's crypto adviser, said.
Trump agrees to some changes as Democrats push back
As Democrats made clear they would block the bill, Trump agreed to some
concessions on ethics, including new restrictions on federal elected
officials from issuing digital assets like the presidential meme coins
he and his wife Melania launched before he took office for his second
term. He agreed to new concessions Sunday, such as additional powers for
state attorneys general that Democrats had sought to enforce the crypto
measures.
Those concessions were not enough for Democrats, who sent a counteroffer
late Monday to expand the ethics provision but were not able to strike a
final deal. Among other issues, they said the bill still needed stricter
enforcement and a requirement for Trump or any future president to
divest if holdings reach a certain value.
"Instead of spending their time twisting themselves into knots to
appease President Trump, Republicans should have worked more closely
with Senate Democrats to craft a bill that could pass with strong ethics
provisions,” said Arizona Sen. Ruben Gallego, who was involved in
last-minute talks with GOP senators on the bill.
Republicans needed Democratic support to win the 60 votes necessary to
move forward on the bill in the 53-47 Senate.
North Carolina Sen. Thom Tillis, a Republican who worked with Gallego to
strengthen the ethics provision, said before the vote that he was
pleased with Trump’s latest concessions.
“We’re so close,” Tillis said. “It’s just a shame to not take this
opportunity.”
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Kraken co-CEO Arjun Sethi speaks as President Donald Trump listens
during a meeting with technology leaders in the Roosevelt Room of
the White House, Aug. 19, 2026, in Washington. (AP Photo/Jacquelyn
Martin, File)
Trump has amassed big crypto profits
Trump’s family has raked in big profits in the crypto sector since
he was reelected, including the meme coin, announced the day before
Trump took office. Top investors were invited to a private reception
with the president.
Trump’s family also has a controlling stake in World Liberty
Financial, a crypto firm co-founded with the president’s special
envoy Steve Witkoff. Trump reported more than $500 million in
revenue from World Liberty Financial sales of crypto products,
including “governance tokens,” in his annual disclosure report filed
with the Office of Government Ethics. That is a significant share of
the more than $1.4 billion that the president reported from crypto
businesses last year.
A measure enacted into law last year regulating stablecoins, a type
of cryptocurrency, barred members of Congress and their families
from profiting off them, but it did not extend to Trump or his
family.
Legislation aims to give crypto firms legal certainty
Republicans who have been working on the legislation for more than a
year say it could now stall indefinitely. The House and Senate will
be out of session during October and before the elections, and the
dynamics could significantly shift if Democrats win back the
majorities of the House or Senate, or both, in November.
Republican Sen. Cynthia Lummis of Wyoming, a lead sponsor of the
bill, said beforehand that a no vote 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.”
Supporters say the legislation aims to give the industry more legal
certainty and protect consumers by creating a broad set of
guardrails and regulatory requirements, including better enforcement
to prevent bad actors and protections to prevent a market collapse.
As talks continued Tuesday morning, Lummis posted on X that it was
“now or never for the Clarity Act,” referring to the bill’s name.
“The time for negotiating is over,” she wrote.
Crypto cash has flooded campaigns
Opponents, mostly Democrats, say the bill is a giveaway to the
industry as crypto companies have become generous donors to
candidates in both parties around the country.
“It’s no secret that they are seeking to ram a bill through Congress
based upon not the merits of the bill, but the threat that they will
spend even more money in elections against people who vote against
it,” said Democratic Sen. Chris Murphy of Connecticut.
In 2024, the crypto industry spent more than $130 million in
congressional races, including $40 million in Ohio and $10 million
each in Arizona and Michigan.
“DC received a clear message that being anti-crypto is a good way to
end your career, as it doesn’t represent the will of the voters,”
Brian Armstrong, the CEO of Coinbase, the nation’s largest crypto
exchange, wrote in a social media post the day after the 2024
election.
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Associated Press writers Seung Min Kim and Joey Cappelletti
contributed to this report.
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