In the early hours of September 16, Beijing time, the U.S. Senate voted on the motion to terminate debate on the Digital Asset Market Clarity Act (CLARITY Act, H.R.3633). The affirmative votes did not reach the 60-vote threshold, and the bill cannot proceed to formal consideration by the full chamber in the short term. All Democratic senators voted against it. The market reacted faster than the legislative process: Bitcoin briefly fell below $75,000, and Ethereum dropped below $2,400; CoinGlass data shows that nearly 120,000 people were liquidated within 24 hours, involving $670 million.

Many Chinese-language reports summarized this as "U.S. crypto legislation failed." For Chinese practitioners, the more important question is another one: what did this change, and what has not changed at all.

I. First, correct two misreadings

The CLARITY Act neither approves nor prohibits crypto.It is a law that allocates regulatory authority, and there is only one criterion for judgment: whether this coin is regulated by the SEC or by the CFTC.

The mechanism is not complicated: where the network is sufficiently decentralized and the token does not represent property rights such as dividends, it is classified as a "digital commodity" and falls under the CFTC; where it has the nature of an investment contract and gives holders rights similar to equity, it falls under the SEC and goes through registration and disclosure; compliant payment-type stablecoins have a separate channel.

It had already gone further than many people thought: on July 17, 2025, the House passed it 294 to 134; on May 14, 2026, the Senate Banking Committee approved it 15 to 9; and on June 1, it was placed on the Senate legislative calendar. It passed the House, passed the committee, and was placed on the calendar, but ultimately died at a procedural vote.

The second misreading is attributing the failure to "Republicans not conceding enough."The facts are the opposite. The final text grew from 300 pages to more than 600 pages and incorporated 126 Democratic amendments. Even the ethics provision on public officials' crypto interests was conceded to the point that Trump nodded in agreement, yet Democrats still did not give a single affirmative vote. A simple calculation shows: Republicans have only 53 seats, and even if all voted in favor, they would still be 7 votes short of the 60-vote threshold. What the other side opposed was not the provisions but the implementation path. This is an internal calculation in Washington and has nothing to do with whether the crypto industry itself is good or bad.

II. Four implications

First, legislation is delayed by at least one year.The session is being squeezed by the budget bill and the November midterm elections. Prediction markets give only a 19% to 20% probability of signature within the year. If you want to wait for U.S. rules to become clear before going overseas, that is equivalent to pushing uncertainty back another year.

Second, token classification currently rests only on administrative guidance, which can be withdrawn at any time.What is operative now is the joint interpretive order issued by the SEC and the CFTC on March 17, 2026 (Release No. 33-11412), which divides crypto assets into five categories, identifies approximately 16 assets as digital commodities, including Bitcoin, Ethereum, Solana and XRP, and clarifies that staking, mining, wrapping and airdrops generally do not constitute investment contracts. The interpretive order is positioned as a "bridge before legislation," and a bridge also means it can be dismantled.

Third, the paths for different sectors are beginning to diverge.Stablecoins have a separate track under way; the DeFi provisions were narrowed in the September revised draft; while projects issuing new tokens, the category in which the vast majority of Chinese project teams fall, remain in the gray area where the SEC determines whether an investment contract is constituted.

Fourth, the market will become more dependent on news flow.After the legislative window closes, rule changes will be advanced through administrative and enforcement channels; such actions come without advance notice, and once implemented they move the market, so those who position based on news flow should be especially cautious.

III. The First Track: America's Vacuum Period Does Not Mean No One Is Regulating

"Legislative failure" is easily read as "no one is regulating anymore"—this is the third misreading.

First, look at the enforcement posture.Since 2025, the SEC has withdrawn its lawsuits against Coinbase and Binance, shifting its focus from "setting rules through enforcement" to "writing the rules clearly first." This appears lenient, but several points remain unchanged: the CFTC's authority over commodity spot markets to combat fraud and manipulation has always existed; issuing unregistered securities and platforms operating without a license remain clear targets; and market manipulation and false advertising will prompt proactive action in both the United States and China.

America's real state is fragmented: stablecoins have a law, but market structure does not yet.The GENIUS Act, signed in July 2025, has established a federal regulatory framework for payment stablecoins; what CLARITY must resolve is the other half—whether a token counts as a security or a commodity. The XRP case shows that, because this half remains unresolved, the SEC v. Ripple case ended in August 2025 with both parties withdrawing their appeals and a $125 million penalty. The case is closed, but the question was never closed: for the same XRP, institutional sales were found to be non-compliant, while secondary market trading did not constitute a securities offering—both conclusions coexist to this day.

One further detail deserves separate mention.The final text of September 14 retained a civil safe harbor for qualifying software developers, but deleted the criminal safe harbor language found in earlier versions. That means the bill did not intend to shield developers from criminal liability, and US legislators did not accept the defense of "I write code and do not touch the money."

IV. The Second Track: China, and It Has Nothing to Do with This Bill

This is the point I most want readers to see clearly.

CLARITY addresses the division of registration and disclosure responsibilities within the US market; it does not change how Chinese law evaluates conduct.Article 6 (territorial jurisdiction) and Article 7 (personal jurisdiction) of the Criminal Law: the issuance of tokens, fundraising, exchange and promotion carried out within the territory are evaluated under Chinese criminal law; relevant conduct by Chinese citizens abroad is likewise pursued where the conditions are met. Yin Fa [2026] No. 42: issuing virtual assets within the territory, issuing RMB-pegged stablecoins, and conducting real-world assets (RWA) tokenization and the associated intermediary and information technology services are all prohibited areas.

The most dangerous position is to be caught under both systems at the same time:Raising funds within the territory is illegal fundraising under Chinese law; issuing in the United States may be found to be an unregistered securities offering under US law. A change of jurisdiction changes where the conduct occurs, not the nature of the conduct itself.

Lawyer's Observations

This failure indeed has no direct impact on mainland teams, but note the following:

Do not write a bill that has not yet been passed into white papers and fundraising materials; it is an external variable, and once written in it becomes your own statement; do not treat the regulatory timetable as a premise of your business model; teams that wait for the rules to become clear before setting out usually never see the rules arrive.