Crypto stocks sink after Senate rejects Clarity Act

Crypto stocks sank Tuesday after the Senate failed to advance the Clarity Act, with Coinbase, Circle and Galaxy each falling more than 8%.The 49-50 Senate vote fell short of the 60 votes needed, dealing a setback to the crypto industry’s push for a federal market structure framework.Broader U.S. stocks also faced pressure ahead of Wednesday’s Federal Reserve decision, but the steeper declines in crypto-linked shares came as investors absorbed the Clarity setback.Crypto stocks were a sea of red Tuesday afternoon after the Senate failed to advance the Clarity Act, dealing a major blow to an industry that has spent years — and hundreds of millions of dollars in campaign contributions — gunning for a comprehensive U.S. regulatory framework.Coinbase COIN$172.56·Market Closed was down nearly 9% at $174.42, while stablecoin issuer Circle CRCL$86.38·Market Closed dropped 9.4% to $88.26. Galaxy Digital GLXY$22.25·Market Closed lost 8% and Gemini (GEMI) fell 7%.The pain spread across the sector. Robinhood HOOD$110.71·Market Closed was down 3%, Bullish BLSH$35.46·Market Closed lost 5% and eToro (ETOR) fell 4%.Among crypto miners, Riot Platforms RIOT$19.62·Market Closed dropped 5%, while MARA Holdings MARA$11.19·Market Closed, CleanSpark CLSK$12.66·Market Closed, IREN and Core Scientific CORZ$16.06·Market Closed were all down between roughly 3% and 4%.The declines came after the Senate voted 49-50 on a procedural motion to advance the Digital Asset Market Clarity Act, well short of the 60 votes required.The bill would have set rules for how different cryptocurrencies and blockchain projects are treated in the U.S., while giving the Commodity Futures Trading Commission (CFTC) greater authority over crypto spot markets.Its failure means the industry will have to wait longer for the kind of legislation many companies have argued they need to make long-term plans in the U.S.The Senate vote wasn't necessarily responsible for the entire selloff. Tuesday's trading was also shaped by investors cutting risk ahead of Wednesday's Federal Reserve decision which will likely end with a rate hike.Bitcoin is down about 3% over the past 24 hours, briefly dipping close to $75,000. Traditional stocks, including the Nasdaq and S&P 500 were in the red as well.