AICoin AI Tokens Drop 10% After US Senate Crushes Federal AI Regulation Freeze

AI-related cryptocurrencies plunged sharply following the U.S. Senate's near-unanimous rejection of a proposed moratorium on federal AI regulation. The 99-1 vote represented a bipartisan rebuke of the industry, with even crypto-friendly lawmakers opposing the measure. Selling pressure intensified as traders assessed the implications of the Senate's decisive stance.

The regulatory setback occurred during heated negotiations over the 'Big Beautiful Bill.' While the legislation ultimately passed, its AI provisions were removed in a dramatic floor vote. Only retiring Senator Thom Tillis supported maintaining the language, underscoring the political sensitivity around AI initiatives.

AI tokens were already facing downward pressure before the vote, with sector capitalization dropping over 5% this week. The Senate action appears to have worsened the decline, though analysts warn against attributing it solely to this event given broader market weakness. This development highlights increasing political risks for crypto projects linked to artificial intelligence.