Brian Armstrong says crypto industry will pursue SEC and CFTC action after Senate blocks CLARITY Act

Brian Armstrong’s declaration that crypto cannot wait for Congress signals the industry’s pivot toward regulatory agencies after the Senate’s failure to advance the Digital Asset Market Clarity Act, forcing institutional investors to recalibrate their policy timeline from legislative to administrative action.

• Senate procedural vote on Digital Asset Market Clarity Act fell short of 60 votes needed to advance the bill Tuesday.
• Brian Armstrong said the SEC and CFTC already possess sufficient authority to establish clear rules without Congressional action.
• Brad Garlinghouse blamed Democratic opposition and ethics negotiations for the failure but expects regulatory agencies to fill the legislative gap.

• 60 votes required to advance the bill; procedural vote fell short of this threshold
• ~12 Democrats were seen as possible supporters but withheld votes after failed negotiations
• 4 Republicans opposed the bill, including three who voted against and one who voted procedurally to preserve reconsideration rights

The Senate failed Tuesday (September 15) to advance the bipartisan Digital Asset Market Clarity Act after the procedural vote fell short of the 60 needed to move forward. The defeat marks a significant setback for an industry that spent months building support, but it has triggered a tactical shift among crypto leaders toward regulatory agencies rather than continued Congressional negotiation. Coinbase co-founder Brian Armstrong acknowledged the disappointment while signaling that institutional crypto may now operate under a different regulatory timetable, one driven by SEC and CFTC rulemakings rather than legislation, according to reporting by CryptoPotato.

Armstrong pivots to SEC and CFTC authority as Congress stalls

Armstrong stated that the SEC and CFTC already possess enough authority to establish clear rules and expects them to work on that in earnest. He emphasized that “clarity” is coming to crypto regardless of Congressional outcome, though the path will be administrative rather than legislative.

This framing matters to institutional investors because SEC and CFTC rulemaking moves faster than bill passage but operates with narrower scope and faces fewer political constraints than Congressional compromise.

Armstrong also noted that some concessions made during CLARITY negotiations were difficult to accept, suggesting the industry may prefer agency guidance to future legislative attempts that demand greater sacrifice.

Garlinghouse blames Democrats and ethics rules for collapse

Brad Garlinghouse, Ripple CEO, said the failure “stings” and called for a post-mortem while attributing the defeat to Democratic opposition and ethics negotiations that prevented a final deal.

He argued that around a dozen Democrats were prepared to support the bill but withdrew after talks broke down over ethics provisions and remained concerns about President Trump and his family’s involvement in the crypto industry.

Garlinghouse framed the loss as a failure of US competitiveness rather than policy merit, appealing to national interest arguments that may resurface in future regulatory or legislative efforts.

Despite the setback, Garlinghouse expressed confidence that SEC Chair Atkins and CFTC Chair Selig will pursue rulemaking to address the legislative gap. This statement signals that industry leadership expects regulatory continuity and is already shifting its lobbying and compliance expectations from Congress to the agencies themselves.

Republicans and procedural tactics leave door open for reconsideration

Four Republicans opposed the bill: Susan Collins of Maine, Josh Hawley of Missouri, and Jerry Moran of Kansas voted against it, while Thom Tillis of North Carolina voted procedurally against the measure specifically to file a motion to reconsider and preserve the possibility of another vote.

Tillis’s procedural vote is significant because it does not signal opposition to the underlying bill but instead creates a technical opening for future passage if political dynamics shift. Delaware Democrat Chris Coons abstained.

The narrow math, falling short of 60 with approximately a dozen Democratic votes available, suggests that the votes exist for passage if negotiations resume on ethics and ethics safeguards satisfactory to wavering Democrats.

Ruben Gallego called for Republicans to have worked more closely with Democrats on a version with stronger ethics provisions, and Catherine Cortez Masto said she negotiated until final moments but left key issues unresolved after Republican leadership ended talks.

We did this for the industry, for consumers and to cement the US’s position as the crypto capital of the world and as a leader in the future of finance. Ultimately, consumers and US competitiveness got left behind.

Brad Garlinghouse, Ripple CEO

The CCS read. We see this pivot, from legislative patience to agency pressure, as the institutional crypto industry’s acceptance that regulatory clarity arrives faster through executive branch action than through Congress. The calculus has shifted: rather than wait 18 months for another bill, major players like Coinbase and Ripple are now positioned to shape SEC and CFTC guidance directly through comment letters and compliance coordination. This favors larger, more litigious firms over smaller projects lacking Washington infrastructure.

Watch for an SEC rulemaking announcement within 90 days addressing spot crypto derivatives or staking custody rules, the two areas CLARITY would have addressed. Tillis’s motion to reconsider remains technically open and could be called if Democratic leadership signals a path forward on ethics language, but Armstrong’s public statement that the industry “cannot wait” removes institutional pressure for Congress to reconvene the bill, making agency rulemaking the de facto regulatory path forward.