Here’s what happened in crypto today

Today in crypto, the US Senate failed to advance the CLARITY Act in a key procedural vote after Polymarket odds sharply fell on the Act becoming law later this year. Meanwhile, a House tax package left out a proposed tax deferral for mining and staking rewards, and Polymarket traders sharply cut their odds of CLARITY becoming law this year amid mounting opposition ahead of the vote.

US Senate blocks CLARTY Act in key procedural vote

The US Senate failed to advance the CLARITY Act on Tuesday, dealing a setback to efforts to establish a comprehensive federal regulatory framework for digital assets.

The cloture motion fell well short of the 60 needed to move the legislation toward debate on the Senate floor. With limited legislative time remaining before a new Congress is sworn in, the failed vote puts the bill’s prospects for this year in doubt.

The CLARITY Act would define federal oversight of crypto markets, including the respective roles of the Securities and Exchange Commission and Commodity Futures Trading Commission. The vote followed months of negotiations over ethics restrictions and other provisions in the bill.

Crypto markets declined around the vote, with Bitcoin dropping below $76,000 as the legislation failed to advance.

US House crypto tax package omits mining, staking reward deferral

The US House Ways and Means Committee will consider a 114-page crypto tax package on Wednesday that leaves out a provision that would have allowed miners and stakers to defer taxation of rewards until the tokens are sold.

The Digital Asset Tax Certainty Act, H.R. 10357, was published alongside the committee’s markup notice on Monday. The package does not include the reward-timing provision contained in Representative Mike Carey’s Tax Clarity for Mining and Staking Act, introduced in June.

The provision would have allowed taxpayers to choose between recognizing newly created tokens as income when received or treating them similarly to self-created property and paying tax when sold.

Without the provision, mining and staking rewards would remain taxable when received or brought under the recipient’s control, potentially before they are sold for cash.

CLARITY Act odds fall to 16% as key Democrats counter GOP’s ‘final’ offer

Odds of the CLARITY Act becoming law this year on Polymarket fell sharply again on Monday after spiking the day before, as key Senate Democrats reportedly said they had not been swayed by Republicans’ “final” crypto bill proposal.  

Polymarket traders initially saw a newly revised Republican proposal with expanded ethics provisions as a positive sign, sending the odds to 35%. However, their confidence was dashed as reservations about the revised text began mounting, with the odds falling back as low as 16% on Monday. 

US Senator Mark Warner, one of the Democrats involved in negotiations, reportedly said the revised ethics provision was not “near enough,” while Democrats involved in negotiations began preparing a counterproposal on Monday. 

Republicans need 60 votes to advance the bill, and failure on Tuesday could stall legislation that would determine how the US Securities and Exchange Commission and Commodity Futures Trading Commission divide oversight of the US crypto market.