The CLARITY Act has hit a big obstacle in the U.S. Senate, and triggered renewed uncertainty across the cryptocurrency market and raising questions about why XRP has reacted so negatively despite its existing legal history.
The Senate failed to advance the legislation on Tuesday after the procedural vote fell short of the required 60 votes. XRP subsequently came under considerable selling pressure, prompting pro-Ripple attorney Bill Morgan to offer an explanation: the token may have had more to gain from the legislation than its existing legal status alone would indicate.
Meanwhile, former Commodity Futures Trading Commission (CFTC) Chairman Christopher Giancarlo argues that the setback will not stop financial innovation in the United States. And despite the failed vote, the CLARITY Act is not necessarily finished.
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Bill Morgan Explains Why XRP Fell So Hard After the CLARITY Act Vote
Bill Morgan raised an interesting question following the Senate’s failure to advance the bill: why did XRP fall more heavily than many other major cryptocurrencies when it already has a degree of legal clarity from the SEC v. Ripple litigation?
The court’s ruling established that XRP itself is not inherently a security, although it also found that certain institutional XRP sales by Ripple violated securities laws. The ruling did not resolve every possible regulatory question surrounding XRP or the broader cryptocurrency market.
Morgan believes the answer lies in what the CLARITY Act could have delivered beyond XRP’s individual legal position.
Why has XRP fallen so sharply on the news of the no vote that has stalled the clarity act.
— bill morgan (@Belisarius2020) September 15, 2026
After all, XRP has more legal clarity than any other crypto because of the decision in SEC v Ripple that XRP itself is not a security.
Shouldn’t this relative legal clarity have…
In his view, XRP stood to benefit substantially from legislation establishing clearer rules for the entire crypto industry. Institutions considering XRP-related products and services also need confidence in the regulatory environment surrounding exchanges, intermediaries and other digital assets.
That means XRP’s existing legal position does not completely insulate it from uncertainty affecting the wider market.
Morgan argued that this could explain why XRP reacted so negatively to the failed vote. He also proposed the reverse scenario: if Congress eventually passes the legislation, the resulting regulatory clarity could have a significant positive effect on XRP’s price.
That remains Morgan’s interpretation rather than a demonstrated causal relationship. XRP’s decline is occurring alongside broader crypto weakness and uncertainty surrounding the Federal Reserve’s September 16 policy decision.
Former CFTC Chairman Says Crypto Innovation Will Continue
Fox Business journalist Eleanor Terrett shared comments from former CFTC Chairman Christopher Giancarlo, who described the Senate’s failure to advance the CLARITY Act as disappointing but rejected the idea that it would stop innovation in the United States.
Giancarlo pointed to SEC Chairman Paul Atkins and CFTC Chairman Michael Selig, arguing that the two regulators remain committed to establishing frameworks that allow financial innovation and market modernization to take place under U.S. law.
His comments introduce an important distinction.
🚨NEW: Former @CFTC Chairman @giancarloMKTS tells me the Senate’s failure to pass the Clarity Act is a disappointment but will not stop the “march of innovation” in the U.S.
— Eleanor Terrett (@EleanorTerrett) September 16, 2026
“@SECPaulSAtkins and @ChairmanSelig are determined to do what their jobs require them to do and put in…
Congressional legislation could establish a more durable framework by defining regulatory responsibilities and setting rules directly in federal law. However, the SEC and CFTC can still pursue rulemaking, guidance and other measures within their existing statutory authority.
Those administrative approaches have limitations. They cannot simply replace legislation where agencies lack the necessary legal authority, and future administrations may change regulatory priorities.
Nevertheless, Giancarlo’s position is that the failure of this particular Senate vote does not mean U.S. regulatory development must stop.
Terrett also announced that she would discuss the issue with Giancarlo and former SEC and CFTC commissioners Timothy Massad, Troy Paredes and Caroline Crenshaw at the Avalanche Summit in New York.
The CLARITY Act Is Not Dead — But Time Is Running Out
The Senate’s failed procedural vote is a serious setback, but it should not be confused with the legislation being permanently defeated.
The measure did not receive the 60 votes required to overcome the procedural hurdle and advance. However, Senator Thom Tillis reportedly changed his vote to “no” as a procedural maneuver that preserves the possibility of seeking reconsideration.
That leaves a potential route for Senate leaders to revisit the legislation if they can negotiate enough support.
The problem is the legislative calendar.
With the November midterm elections approaching, lawmakers have limited time to resolve disagreements and secure the votes needed to move the bill forward. A renewed attempt would still have to navigate Senate procedures and any remaining legislative steps, including resolving differences with the House-passed version before legislation could reach the president.
The bill’s disputes have included stablecoin-related provisions, ethics restrictions and the allocation of regulatory responsibilities.
Consequently, the possibility of reconsideration should not be mistaken for an assurance that the CLARITY Act will pass this year.
The immediate result is a stalled bill, not necessarily a permanently dead one.
Read also: Senator Lummis Warns What Happens If the CLARITY Act Fails
What Happens Next for XRP?
Morgan’s argument creates an interesting longer-term scenario for XRP.
If the CLARITY Act eventually becomes law, broader regulatory certainty could make it easier for financial institutions to evaluate cryptocurrency products, trading infrastructure and related services. Morgan believes XRP could benefit considerably from that development.
However, passage would not automatically translate into higher XRP prices. Institutional adoption, liquidity, overall market conditions and the actual provisions of the final legislation would all matter.
In the near term, XRP also faces a separate macroeconomic catalyst: the Federal Reserve’s interest-rate decision at 2 p.m. ET on Wednesday, September 16.
That means the market has two distinct uncertainties to digest. The CLARITY Act has encountered a major legislative setback, while the Fed’s decision could affect risk appetite across cryptocurrencies.
For now, Morgan sees XRP’s unusually negative reaction as evidence of how much the market had riding on broader regulatory clarity. Giancarlo, meanwhile, believes regulatory progress can continue even without immediate congressional action.
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