This week decoded
Big swings are not limited to crypto markets. Setting the stage this week, Washington moves on from a major legislative setback on market structure legislation but also with meaningful progress on digital asset tax policy and a long-awaited SEC initiative.
The downs
Congress’s calendar is tightening quickly. The House left Washington abruptly last week, and it remains unclear when the Senate will depart for the remainder of the campaign season, leaving limited time and an uncertain path for any further crypto legislation.
The Senate’s CLARITY Act effort suffered a significant setback when a cloture motion failed 49–50, short of the 60 votes required to advance. All Democrats and three Republicans, Sens. Susan Collins (R-ME), Josh Hawley (R-MO), and Jerry Moran (R-KS), voted against the motion.
In the hours before the vote, Senate Republicans circulated a final offer they said incorporated numerous Democratic requests. Democrats, however, viewed the proposal’s ethics provisions as inadequate and issued a counteroffer shortly before the vote. The result was immediate and familiar: both parties blamed the other for the breakdown.
Some Republican leaders have declared the bill effectively dead, while Democratic Senators have maintained that they remain willing to negotiate. For now, the prospect of additional legislative action is increasingly uncertain, with attention quickly shifting toward what the SEC and CFTC can accomplish administratively.
The ups
The House Ways and Means Committee advanced a broad digital asset tax package on a bipartisan 38–5 vote. Notably, the measure moved forward without its most politically contentious provision, language addressing the timing of income recognition for staking and mining rewards.
Its outlook in the Senate is less clear. Senate Finance Committee Chair Mike Crapo (R-ID) and Ranking Member Ron Wyden (D-OR) have worked on digital asset tax issues for years and are developing their own framework. Even if a final bill does not move this Congress, members repeatedly stated that digital asset tax policy remains an active area of congressional work heading into the next Congress.
Meanwhile, the SEC released its long-awaited innovation exemption, creating a potentially important new avenue for regulatory engagement and product development.
Read more below
Congress
Hearings
Last week
On September 15, the Small Business Subcommittee on Innovation, Entrepreneurship, and Workforce Development held a hearing on “Main Street Meets Crypto: What Digital Assets Mean for Small Businesses.”
On September 15, the House Committee on Financial Services held a hearing on “The Annual Testimony of the Secretary of the Treasury on the State of the International Financial System.”
Legislation
The House passed the Guarding Unprotected Aging Retirees from Deception (GUARD) Act to permit State, local, and Tribal law enforcement agencies to use eligible Federal grant funds for investigating elder financial fraud, pig butchering, and general financial fraud, and to clarify that Federal law enforcement agencies may assist State, local, and Tribal law enforcement agencies in the use of tracing tools for blockchain and related technology.
The House Ways and Means Committee passed the Digital Asset Tax Certainty Act.
The House Financial Services Committee passed the American Reserve Modernization Act to establishes a Strategic Bitcoin Reserve and a separate Digital Asset Stockpile within the Department of the Treasury for federally held Bitcoin and other digital assets acquired through criminal or civil forfeiture.
Senate Banking Digital Assets Subcommittee Chair Cynthia Lummis (R-WY), Senate Agriculture Chair John Boozman (R-AR) and Senate Banking Chair Tim Scott (R-SC) released a final draft of the Digital Asset Market Clarity Act. Democrats responded with a counteroffer. (Text)(Counteroffer)
Rep. Darrell Issa (R-CA) introduced the Digital Asset Inventory and Audit Act to ensure the federal government identifies, secures, and accounts for cryptocurrency and other digital assets that come into its custody. (Text)
Correspondence
House Foreign Affairs Committee Chair Brian Mast (R-FL) and Select Committee on China Chairman John Moolenaar (R-MI) sent a letter to Secretary of State Marco Rubio and Secretary of the Treasury Scott Bessent urging an investigation into and sanctioning of foreign persons credibly linked to online scam centers in Southeast Asia. They said, “Americans are being scammed online at enormous and still growing rates, due primarily to a network of Chinese transnational criminal organizations based in Southeast Asia. These criminal syndicates have built industrial-sized compounds devoted to perpetrating complex online scams, including cryptocurrency investment scams often known as ‘pig butchering.’ These operations exploit Americans’ goodwill and good intentions through romance cons and other forms of devastating psychological manipulation.” (Letter)
Publications and Events
The Senate Banking Committee will host a Republican-only roundtable on securities-based prediction markets. (Punchbowl)
The Congressional Research Service published a report on “GENIUS Act (P.L. 119-27): Creating a Regulatory Framework for Stablecoins” (Report)
Trump Administration
Securities and Exchange Commission (SEC)
Through its Innovation Exemption, the SEC issued an order granting two forms of temporary, conditional exemptive relief under Section 36(a)(1) of the Securities Exchange Act of 1934: 1) Exempting Tokenized Securities Venues (TSVs) from the definition of “exchange” under Section 3(a)(1) of the Exchange Act, and 2) exempting certain liquidity providers from the definition of “dealer” under Section 3(a)(5) of the Exchange Act. The exemptions expire five years after publication. The SEC is seeking public comment about possible modifications to the exemptive relief and potential next steps. (Press release)
Commodity Futures Trading Commission (CFTC)
The CFTC’s Market Participants Division issued a no-action position saying they will not recommend the Commission take enforcement action against any passive software provider or their relevant personnel for failure to register as an introducing broker or associated person of an introducing broker. This position applies only to the provision and marketing of software to facilitate trading by the provider’s users with registered futures commission merchants, introducing brokers, and designated contract markets. Native American tribes can rely on this guidance to enter into the prediction markets. (Press release)
Noteworthy Quotes
ADMINISTRATION
White House
Council of Economic Advisers Chair Chris Phelan announced the White House would launch an interactive tool to allow users “to set the parameters, run the scenarios, and see for themselves… there is no meaningful relationship between stablecoin growth and community bank deposit flight.” (Semafor)
Patrick Witt, executive director of the president’s Council of Advisers for Digital Assets, said, “The CEA analysis is clear: the data simply does not support the deposit flight narrative that DC bank lobbyists are pushing on stablecoin rewards… [The Clarity Act] includes real safeguards to protect community banks if the deposit flight scenario ever did materialize… banks get none of those protections if the bill fails.” (Semafor)
Witt posted “Crypto companies have been offering rewards on stablecoins for years. We don’t need to speculate: If the deposit flight myth were real, it would have already occurred. Instead, data shows bank deposits are going up, not down. Still, the compromise contained in Section 404 of the Clarity Act restricts the payment of stablecoin rewards that mimic interest on bank deposits. The latest draft now also adds a “circuit breaker” granting the Secretary of the Treasury extraordinary authority to further restrict stablecoin rewards in the event the boogeyman of deposit flight materializes. If Clarity fails, banks get none of these protections.”
Treasury Department
Treasury Secretary Scott Bessent posted “I’ve said many times that the CLARITY Act is essential to ensuring America wins the global race for new technology. That’s the reason Congress passed the GENIUS Act: to ensure that stablecoin infrastructure, a revolutionary financial technology, will be built in America. Ensuring that America’s community bank sector continues to thrive has been a constant focus of mine since day one. And the administration’s dual focus on enabling new digital technology to flourish and appropriately tailoring community bank regulation is key to both sectors driving U.S. economic growth together over the next several decades. The final draft of the CLARITY Act furthers this mission. It gives the Secretary of the Treasury additional authority to act if the facts around deposit flight change to the detriment of community banks. If stablecoins cause harm to community banks, I will not hesitate to use these tools to ensure they remain fully protected. Community banks are essential to U.S. economic performance and Main Street growth. Economic security is national security, and community banks play a major role in this principle.”
Securities and Exchange Commission (SEC)
On the SEC Innovation Exemption, Chair Paul Atkins said in a statement, “The Commission is not cementing today’s technology as the standard for tomorrow. Instead, it is allowing the market to evolve, monitoring its development, and using that insight to inform a nimbler and future-ready regulatory framework. The Innovation Exemption, while temporary, would allow TSVs to trade tokenized NMS stock in a permissioned environment today while the Commission considers the need for additional action to facilitate onchain trading. As we take this important first step, we invite public comment on all aspects of the Innovation Exemption to help inform the Commission as it considers further changes. Critically, this interim measure must be followed by durable rulemaking to ensure that onchain markets remain a viable pathway as our capital markets continue to evolve.” (Statement)
After the failed CLARITY vote, Atkins posted “My thanks go to everyone who put so much effort into the CLARITY Act— across the Administration, Congress, investors, and innovators. Our collective conviction that America must continue to lead is indispensable. I have been unequivocal: with or without legislation, we will act decisively within the SEC’s statutory authority to deliver certainty for American investors and for the entrepreneurs shaping our technological future. Stay tuned.”
Commodity Futures Trading Commission (CFTC)
After the failed Senate CLARITY vote, CFTC Chair Michael Selig posted “The outcome of yesterday’s Senate vote was unfortunate. President Trump promised to deliver a future-proof crypto asset regulatory market structure one way or the other, and we will help him get the job done using our existing statutory authorities. The U.S. is and will remain the crypto capital of the world. The CFTC is locked in and ready to ship its rules for the new frontier of finance.”
CONGRESS
After CLARITY Act Vote
An anonymous Senator told reporters, “The whole negotiation was not at the level of execution that we needed for something as complex as this.” (Punchbowl)
Following the vote, Sen. Cynthia Lummis (R-WY) said, “The bill is dead.” (Politico)
Lummis released a statement saying, “This afternoon, Senate Democrats proved they were never truly serious about protecting consumers and preserving American leadership. I sat at the table with Senate Democrats working in good faith to get this done while they played games. For over a year, they presented demands and the second we met them, they made new demands and moved the goal posts. Today they voted against real limitations on politicians’ personal crypto investments. They voted against protecting American consumers from the scammers and fraudsters this bill would have shut down. They voted against American leadership, and handed China and every one of our foreign competitors exactly what they wanted. Democrats chose politics over the American people—again. That’s not leadership on their part, that’s surrender to their radical, socialist base. The once-proud Democratic party is anti-consumer and pro-illicit finance, anti-ethics, anti-free enterprise, anti-worker, anti-livable wage jobs, and pro-socialism. The Democrats are now anti-American. Sad!” (Press release)
Lummis posted “Democrats wanted the SEC and CFTC to be formally empowered with rulemaking authority to fight insider trading in digital assets. The Clarity Act delivers it. Democrats voted no anyway.”
Lummis also posted “Democrats insisted the SEC keep full authority to police fraud and market manipulation in digital assets. We preserved it word for word. Senate Democrats killed the bill that protects investors from fraud.”
Sens. Ruben Gallego (D-AZ), Kirsten Gillibrand (D-NY), Angela Alsobrooks (D-MD), Cory Booker (D-NJ), Catherine Cortez Masto (D-NV), Mark Warner (D-VA), and Raphael Warnock (D-GA) issued a statement saying, “Democrats have spent the last two years working to pass crypto legislation that would expand opportunity, protect consumers, punish bad actors, create regulatory certainty, and include strong, commonsense ethics provisions for elected officials. This week was a setback, but not the end of that important work. We remain committed to working in a bipartisan fashion to get this legislation passed.” (Press release)
Sen. Angela Alsobrooks (D-MD) said, “I’m convinced now leadership never wanted it to pass. They wanted to have the president persist in his poor behavior. That’s why this didn’t happen.” (Punchbowl)
Alsobrooks posted “We must regulate digital assets, protect consumers, and give innovation room to grow. But innovation cannot come at the expense of ethics and accountability.”
Senate Democratic Leader Chuck Schumer (D-NY) said, “Years of work to provide clarity to the industry down the drain, thanks to the Republican leadership.” (Punchbowl)
Senate Majority Leader John Thune said in floor remarks, “Mr. President, digital assets are firmly rooted in the United States. One in five American adults has invested in or used cryptocurrency. The overwhelming majority of crypto owners want clear rules of the road and protections like those provided in the GENIUS Act and the Clarity Act. Mr. President, this is a shared priority for Republicans, Democrats, and President Trump. We’ve been working at it now for over a year. The only reason for this progress to end now would be if Democrats choose politics over good policy. And now is not the time for political games. We’ve seen what regulatory certainty did to promote innovation and growth in stablecoins. We have an opportunity to do that across the entire digital asset industry by passing the Clarity Act. We should take the opportunity, Mr. President, before us to ensure this innovation happens right here in America and that the United States remains the leader in financial technology well into the future.” (Remarks)
Sen. Bill Hagerty (R-TN) posted “Today, SenateDems refused to give Clarity a final vote. America should be the leader in cryptocurrency and blockchain technology. Democrats are ceding the ground to our foreign adversaries. The American people deserve better, and now they know where Democrats stand after a year of back and forth negotiations. Shameful!”
Senate Banking Chair Tim Scott (R-SC) said, “We moved the ball forward, and now it’s time for the SEC and CFTC to set clear rules of the road for digital assets until Congress legislates.” (Politico)
In advance of the vote, Scott said, “The truth is that without market structure actually being embedded in the laws of our country, you have the wild, wild west, and what we see every single time we step up to create rules of the road, Americans are safer. Developers understand their power and the direction necessary to create here at home in America.” (Press release)
Scott posted “Today, nearly all Senate Republicans voted to advance the Clarity Act, but the motion fell short because of Senate Democrats. We moved the ball forward, and now it’s time for the SECGov and CFTC to set clear rules of the road for digital assets until Congress legislates. My focus remains on single moms and Americans living in poverty, like I did growing up. I’ll keep working to protect their hard-earned money and keep the future of finance here in America.”
Sen. Thom Tillis (R-NC) said, “I wouldn’t read a lot into [the SEC and CFTC] right now. I’d read into it that you got a strong will on the part of Republicans and probably enough Democrats to get [Clarity] done if they want to sit down and really get it done. There’s only so far [the agencies] can go, and it’s not addressing a lot of the core issues.” (Politico)
Sen. Dave McCormick (R-PA) said, “Today, Senate Democrats blocked the vote to advance the CLARITY Act. I’m deeply disappointed at this outcome. For more than a year, Republicans and Democrats worked together in good faith to develop a clear, responsible regulatory framework for digital assets. The legislation before the Senate today incorporated substantive changes requested by Democrats, real concessions designed to address concerns from both sides of the aisle and build a durable bipartisan framework. The status quo leaves consumers and investors worse off and cedes U.S. financial leadership overseas. At a time when our global competitors are racing ahead, American entrepreneurs, investors, consumers, and financial institutions in Pennsylvania and across the U.S. deserve clear rules of the road that protect consumers while allowing innovation to flourish here at home. This issue isn’t going away, and neither is my commitment to getting it done. Community banks and entrepreneurs in Pennsylvania are worse off without CLARITY. I’ll continue working with colleagues on both sides of the aisle to deliver the certainty America needs to remain the global leader in financial innovation.” (Statement)
Sen. John Kennedy (R-LA) said, “I think you’re going to see this bill come back up again in the lame duck. An awful lot of work went into this, in good faith, by both sides.” (Punchbowl)
Sen. Elizabeth Warren (D-MA) said in floor remarks, “This is not what the American people want. They want Congress to do something about the affordability crisis. They want an end to Trump’s war in Iran. They want their elected leaders to step up and regulate AI. According to a survey by crypto news outlet CoinDesk, just 1% of respondents ranked crypto as their top concern. Another poll found that if there’s anything that voters want to do on crypto, it is to put in place meaningful anti-fraud and anti-corruption measures. That’s the kind of thing this bill glaringly fails to do. So why are we here? We need crypto regulation, yes we do—but not a crypto bill written by the crypto industry to benefit only the most extreme voices in the crypto industry—at the expense of our national security, our economic stability, and to help the most corrupt President in the history of the United States make himself even richer. I urge my Republican colleagues to come to the table and negotiate a real bipartisan crypto bill. But until then, I urge my colleagues to vote no.” (Press release)
Sen. Bill Hagerty (R-TN) posted “Today, the Senate will vote on the Clarity Act. It must pass. Clarity helps put America in the drivers seat when it comes to digital assets and blockchain technology. We need clear rules of the road for customers and our financial system. Let’s get it done.”
Sen. Dave McCormick (R-PA) posted “Today, Senate Democrats blocked the vote to advance the CLARITY Act. I’m deeply disappointed at this outcome. For more than a year, Republicans and Democrats worked together in good faith to develop a clear, responsible regulatory framework for digital assets. The legislation before the Senate today incorporated substantive changes requested by Democrats, real concessions designed to address concerns from both sides of the aisle and build a durable bipartisan framework. The status quo leaves consumers and investors worse off and cedes U.S. financial leadership overseas. At a time when our global competitors are racing ahead, American entrepreneurs, investors, consumers, and financial institutions in Pennsylvania and across the U.S. deserve clear rules of the road that protect consumers while allowing innovation to flourish here at home. This issue isn’t going away, and neither is my commitment to getting it done. Community banks and entrepreneurs in PA and across America are worse off without CLARITY. I’ll continue working with colleagues on both sides of the aisle to deliver the certainty America needs to remain the global leader in financial innovation.”
Sen. Katie Boyd Britt (R-AL) posted “Today’s outcome is deeply disappointing. For months, Republicans and the White House negotiated in good faith in an effort to build bipartisan support for legislation that would provide clear rules of the road for digital assets. This was a missed opportunity to protect consumers, support American innovation, and provide much-needed regulatory certainty. It is unfortunate that partisan politics ultimately prevented the Senate Democrats from moving forward. But the need for clarity has not gone away. I encourage the SEC and CFTC to move forward within their respective authorities to provide the certainty American innovators, investors, and consumers deserve.”
Sen. Elissa Slotkin (D-MI) posted “Today, I voted no on the Clarity Act, legislation meant to regulate cryptocurrency in America. The ethics provisions in this bill are simply too thin. President Trump, his children, and his Cabinet are making billions of dollars in the crypto space, in part from bilking everyday Americans out of their hard-earned money. I cannot in good conscience vote for any legislation that codifies that behavior from public officials. Not for President Trump or Secretary Lutnick today, nor for any Democrat who may take advantage of it in the future. On the national security front, there is more to be done to make sure we have the tools in place to stop money laundering and shut down funding avenues for terrorists and nations like North Korea and Iran. This was essential after 9/11 and remains essential to keep Americans safe. And as of now, our agencies, including the CFTC, lack the necessary oversight and staffing to implement this legislation, and that should be addressed. There are strong, bipartisan provisions in this bill that could serve as the foundation for a new attempt at providing the crypto industry with the guardrails it needs. I believe that the U.S. should lead the world in cryptocurrency innovation, but we need to get it right. I remain open-minded to that work ahead.”
Sen. Kevin Cramer (R-ND) posted “Elizabeth Warren and the Democrats blocked the Clarity Act because they’d rather obsess over President Trump’s personal finances than establish the necessary guardrails to secure American leadership in digital assets. Even though POTUS and Senate Republicans have negotiated with them for months in good faith, they couldn’t take off their TDS-tinted glasses to even debate or improve the bill. The choice in front of us is simple: create a market structure for digital assets at home to protect Americans’ involvement in the industry or watch Americans risk their money in unsafe foreign countries led by less than noble leaders. American financial innovation and ingenuity must be protected by an American legal framework. Given Democrats’ obstruction, the administration should use its authority to finalize appropriate market structures for investors in digital assets.”
Sen. Jeanne Shaheen (D-NH) posted “Any legislation creating rules of the road for cryptocurrency must include robust ethics standards so that no one, especially someone in a position of power, can abuse the system for their own financial gain. The current version of the Clarity Act falls short.”
Sen. Jon Husted (R-OH) posted “We must continue to compete and win in global banking, including digital assets, and to do that, America—not China—should set the rules of engagement. The U.S. Senate had the chance to do just that with the Clarity Act today and not one Democrat would join us to move the bill forward. This is not a partisan issue—it’s an American issue.”
Sen. John Cornyn (R-TX) posted “Today, I voted to proceed to debate on the Clarity Act, legislation that would provide oversight on digital assets like crypto. Congress should establish a federal framework to protect investors, provide clear rules of the road, and promote American innovation and entrepreneurship. However, I remain concerned about the bill’s impact on law enforcement, national security, and community bankers, and look forward to continuing to work with my colleagues to improve the bill.”
House Committee on Agriculture posted “Today’s vote does not change the need for Congress to enact clear rules of the road for the digital asset ecosystem. Only Congress can provide the lasting legal certainty that consumers and businesses need to participate in these markets with confidence and necessary protections.”
Sen. Tina Smith (D-MN) posted “We just spent a month outside of the DC bubble and instead of coming back to address any of the concerns we heard back home (gas prices, Iran, data centers) the FIRST thing Republicans made us work on is a crypto bill that benefits the industry that spent tens of millions of dollars bankrolling them in the last election.”
Sen. Tina Smith (D-MN) posted “We certainly need real crypto regulations that are much stronger than the CLARITY Act. But there seem to be bigger fish to fry right now!”
Rep. Brad Sherman (D-CA) posted “I’ve opposed the crypto industry’s CLARITYAct and every prior draft from day one. Its loopholes for illicit finance and failure to prevent the President from profiting off his own crypto were never things the administration or crypto industry actually intended to fix. Pleased to see a majority of the Senate saw through it today and voted NO.”
Sen. Michael Bennet (D-CO) posted “I voted NO to advance the Clarity Act because it fails to rein in the President’s rampant corruption, letting him and his family continue amassing billions from unethical crypto ventures. I’ve long called for real guardrails on cryptocurrency to restore Americans’ trust in our political institutions and ensure no federal official can profit from their position of power. I cannot support legislation that falls short of that goal.”
Sen. Michael Bennet (D-CO) posted “The American people deserve real guardrails on crypto. The Clarity Act is weak legislation that will only enable the President to continue lining his pockets while in office.”
Sen. Jeff Merkley (D-OR) posted “There’s no way I’d vote for a bill that permits Trump to continue his crypto grift. Insufficient anti-corruption standards and ethics guardrails ALONE is enough to make the CLARITY Act a non-starter.”
Sen. John Kennedy (R-LA) said, “I knew when [Trump financial disclosure] happened that the Democrats were going to blow up and that they were going to insist on having their way on the ethics provision.” (Politico)
House Financial Services Ranking Member Maxine Waters (D-CA) said, “No one need look any further as to why the Republicans’ crypto market structure bill, the CLARITY Act, failed in the Senate in a bipartisan vote than the fact that it did nothing to rein in Trump’s overt, pernicious, and dangerous corruption. Until Congress passes legislation to end the President’s crypto profiteering and recoup his ill-gotten gains, any legislation in the crypto space would only serve to validate and condone his worst actions.” (Press release)
Rep. Greg Casar (D-TX) posted “Democrats should not support this bill that allows Trump to make buckets of corrupt money from crypto. Six weeks from an election. What are we doing?”
Impact of Political Giving on CLARITY
Sen. Cynthia Lummis (R-WY) said, “I don’t think it says anything about the crypto industry’s ability to get its way. I think this got caught up in not policy, but in politics. And that’s it. This was a purely political move on the part of the Democrats. And no policy could have gotten their support.” (Politico)
Sen. Bill Hagerty (R-TN) said, “Clearly, the crypto industry’s influence is nonexistent with the Democrat Party. I know that there’s been a lot of effort put in place for the crypto industry to play in a bipartisan way. I think that’s turned out to be a rather naive approach. And my view is, this is a wake-up call to the industry. They ought to take this message that was sent by the Democrats today with all seriousness.” (Politico)
Sen. Tina Smith (D-MN) said, “People are looking at … all this big tech money that is basically trying to buy elections by using campaign money to pick their chosen candidate, and people are pissed about it. They don’t like it.” (Politico)
Sen. Chris Van Hollen (D-MD) said, “First and foremost, it shows that the Trump administration refused to deal with the core ethics conflict-of-interest issues at the heart of this bill. But I think it also should be a clear message that people aren’t going to be stampeded into passing something just based on tens of millions of dollars of super PAC money spent.” (Politico)
Sen. Chris Murphy (D-CT) posted “This system is so corrupt. The problem here is that there is no explicit promise from the crypto billionaires to stop spending money against Members who vote for the crypto industry written bill? No that’s not the problem.”
Rep. Jim Himes (D-CT) said, “They instilled some fear around here, no question. But what they really ought to do is go out there and produce some applications that actually improve the lives of a lot of Americans. Because right now, the Congress looks at these guys and they see Sam Bankman-Fried, they see a bunch of stuff like non-fungible tokens and the use of the medium by drug dealers. Go out there and produce some applications that actually have our constituents excited, like Uber did. They haven’t done that yet.” (Politico)
Rep. Brad Sherman (D-CA) said, “You do not want to be in a Democratic primary as a pro-crypto candidate — no matter how much money the crypto people give you.” He added, “Democratic voters were very skeptical of crypto before Trump embraced it. And now that Trump has embraced it, boy do they hate it.” (Politico)
Before Clarity Act Vote
Senate Majority Leader John Thune (R-SD) said, “We’ll find out if Democrats actually want to pass this legislation. It’s time to vote. It’s time to put up or shut up.” (Punchbowl)
Sen. John Cornyn (R-TX) said, “I’m not sure [the latest text] addresses the issues I’m concerned about, which is what community bankers are concerned about… [he is] looking forward to having a conversation and seeing where the votes are.” (Semafor)
Sen. Susan Collins (R-ME) said, “It’s more than 600 pages, with a new ethics provision in it and other provisions that I need to look at, such as whether it would cause community banks to lose deposits.” (Punchbowl)
Sen. Ruben Gallego (D-AZ) said the Republican ethics language “leaves a lot to be desired. (Politico)
Sen. Thom Tillis (R-NC) said, “If [Republican negotiators] think this is a final deal, it’s not their call.” (Politico)
Sen. John Kennedy (R-LA) said, “My sense is that most — not all, but most — Republicans are going to vote to get on the bill, and I would include in that number those who have reservations about it and would likely ultimately vote ‘no’… But I don’t know what my Democratic friends are going to do.” (Politico)
Sen. Mark Warner (D-VA) said, “The Democrats who’ve been working on this in good faith are sending a counterproposal.” (Politico)
Sen. Raphael Warnock (D-GA) said about the counterproposal, “We’ll see where the Republicans land, and if they’re serious about a viable path.” (Politico)
Sen. Shelley Moore Capito (R-WV) said, “Well, I think it’s so important that we set the parameters of our digital assets so that we can not only be assured that the dark money, the drug money, the cartel money that flows through a lot of these currencies is held in check and held accountable. There’s a lot of loose ends that still need to be tied up. I’m very hopeful for Tuesday, and I want to thank Senator Lummis, she’s been such a champion here for all of us, and she’s working hard. She’s already put 100 revisions into the bill. This is a must do, I think, for the future, and I’m certainly a supporter, hoping that the changes that we can make will bring us over the finish line.” (Press release)
Rep. Warren Davidson (R-OH) posted “Section 305 of the Clarity Act needs removed before passage. Section 305 lets exchanges and stablecoin issuers pause a suspicious transaction for 30 days, extendable to 180 days on a written request from law enforcement. Companies get a safe harbor from civil lawsuits if they freeze funds in good faith. Customers may get little or no timely notice or chance to contest the freeze in court first. Effectively, civil asset forfeiture. The right to transact pre-dates government. It should not be infringed without due process or informed consent. To abridge this right, they are working to make all payments account-based and permissioned. This completely defeats the point of crypto: permission-less, peer-to-peer payments at the speed of light.”
Rep. Warren Davidson (R-OH) posted “With the benefit of hindsight, GENIUS released pressure necessary to force a decisive vote on the President’s full digital asset executive order. While stablecoins have partially passed, what remains? Protect self-custody, completely ban CBDC, pass market structure (Clarity). Pressure and deadlines are essential. Perhaps both can be leveraged to restore focus to Clarity and pass the full agenda by year end? After all, the only Congress we control is the one we’re in... PS: Plenty of pro-cryto Republicans shared my concerns on strategy and, like me, opposed GENIUS because it was and remains incomplete.”
Sen. Bernie Moreno (R-OH) posted “Clarity Act Update! Tuesday at 2:15 p.m. ET, the Senate takes its first procedural vote on the Clarity Act. This is not a vote on final passage. It is a vote to end debate on whether the United States Senate should even consider a bill to regulate digital assets. We have spent thousands of hours writing a framework so America leads this technology instead of watching it leave. Dozens of Senators have been in the room. It already cleared committee with a bipartisan vote. The House already passed it. A ‘no’ on Tuesday is not a thoughtful objection to a provision. It is a vote to keep an entire industry in the dark with no rules, no American framework, and let it develop overseas. That is an absurd position. If Senators have concerns about the bill, they can offer an amendment after we agree to take it up. That is how the Senate is supposed to work. To my colleagues: vote yes on Tuesday. Consider the bill. Regulate this industry in the United States. Do not hand the future of digital assets to other countries because we failed to do our jobs.”
Sen. Chris Van Hollen (D-MD) posted “In August, we stopped the Clarity Act, but when the Senate returns this week the crypto industry & their Republican flunkies in Congress will try again. As is, this bill does nothing to stop Trump’s crypto corruption or the use of crypto by bad actors. We can’t let this pass.”
Sen. Chris Van Hollen (D-MD) posted “Doesn’t change the fact that I can read. And what’s in this bill are loopholes that continue to enable Trump’s crypto corruption. It also doesn’t do near enough to prevent bad actors from using crypto or to safeguard American consumers. By the way, I’ve made my objections clear from day 1 — I offered several amendments to fix these issues in Committee. You and your Republican colleagues blocked them.”
Sen. Cynthia Lummis (R-WY) posted “If Senators want to vote against implementing tough restrictions on politicians for crypto investments then that is up to them. A majority of Americans will disagree with that choice.”
Sen. Cynthia Lummis (R-WY) posted “Tomorrow, my colleagues have a choice to make: American leadership, real consumer protections, and giving law enforcement the tools they need to address illicit finance, or drive the digital asset industry overseas, leaving consumers vulnerable, and sidelining American leadership knowing full well that no other country is capable of regulating this industry as well as the United States. The choice really is that clear. The Clarity Act is right in front of us and this moment won’t come along again for years. Let’s take the win and get this done.”
Sen. Cynthia Lummis (R-WY) posted “A no vote tomorrow kills the toughest ethics reform this country has ever put on the books, kills consumer protections for every American holding digital assets, and hands the future of this industry to our foreign competitors.”
Sen. Richard Blumenthal (D-CT) posted “Trump is using crypto to cash in on the presidency—selling access to the highest bidder & raking in the money from foreign governments. We need strong legislation that ends this self-dealing & corruption—not half measures like the Clarity Act.”
Sen. Richard Blumenthal (D-CT) posted “Americans are being scammed out of billions of dollars while Trump is using crypto to turn the presidency into a profit generating machine. The Clarity Act’s weak rules & carveouts would supercharge fraud & undermine law enforcement.”
Sen. Richard Blumenthal (D-CT) posted “The Clarity Act purports to prevent crypto conflicts of interest & corruption by the President of the United States but that is a sham. It’s a charade. It should prompt a no vote by every member of the United States Senate.”
Sen. Katie Boyd Britt (R-AL) posted “The CLARITY Act gives digital assets clear rules of the road, protects consumers, and keeps innovation and jobs in America. Congress has an opportunity to ensure America leads the future of digital finance. Let’s get this done.”
Sen. John Thune (R-SD) posted “The overwhelming majority of crypto owners want clear rules of the road and protections like those provided in the GENIUS Act and Clarity Act. This is a shared priority for Republicans and Democrats. The only reason for this progress to end now would be if Democrats choose politics over good policy.”
Thune also posted “More than 50 million Americans use cryptocurrency, and they overwhelmingly agree that it is time to introduce some regulations and guidance for this industry. If Democrats do not take ‘yes’ for an answer, those responsible for impeding a successful result will be clear to everyone.”
Sen. Dave McCormick (R-PA) posted “The CLARITY Act strengthens and modernizes the law enforcement tools necessary to target bad actors and combat illicit digital asset activities. A vote against the CLARITY Act preserves the status quo and would shirk our responsibility to protect U.S. national security and bolster consumer protections.”
Sen. Elizabeth Warren (D-MA) posted “What’s on the agenda this week? Senate Republicans are trying to jam through a crypto bill that would let Trump continue lining his pockets off the crypto industry. We’re live on the Senate floor to fight back.”
Rep. Tom Emmer (R-MN) posted “The Senate has held on to the Clarity Act for far too long. It is time to take action to ensure stability and innovation in digital assets for years to come.”
Digital Asset Tax Certainty Act
House Ways and Means Committee Chair Jason Smith (R-MO) issued a statement on the Committee’s approval of the Digital Asset Tax Certainty Act, saying, “The Digital Asset Tax Certainty Act is the product of bipartisan discussions and collaboration among members of the Ways and Means Committee to address the uncertainty and burdensome compliance challenges that threaten to undermine the rapidly growing and increasingly popular $2 trillion digital asset economy. By providing American consumers and investors with more certainty surrounding the tax treatment of digital assets, establishing parity with traditional financial assets, and updating tax rules to keep pace with this innovative technology, we will ensure the United States is the crypto capital of the world. This legislation would be the first-ever federal law to address the substantive tax treatment of cryptocurrencies and other digital assets – affecting the one in four Americans that currently hold some form of cryptocurrency, more than 67 million people. This is a historic step that has tremendous economic and innovative potential for our nation. I want to commend members of the Committee, on both sides of the aisle, for working together to chart a clear course forward for America’s digital asset economy.” (Press release)
Rep. Steven Horsford (D-NV) said, “People deserve a tax code that is fair, understandable, and keeps pace with how they live and work. Americans who use digital assets need clearer rules and greater certainty. This agreement makes progress while strengthening safeguards to prevent abuse. The legislation applies established tax principles to digital assets, clarifies ordinary-income treatment for mining and staking rewards, and establishes clearer rules for digital asset transactions. Horsford helped shape the agreement through sustained negotiations with colleagues across the aisle. America should lead in innovation, and the opportunities it creates should reach working people and entrepreneurs,” said Rep. Horsford. “I stayed engaged to make this legislation stronger and support responsible growth, protect tax fairness, and give taxpayers rules they can understand and follow. We found common ground and moved a bipartisan agreement forward.” (Press release)
Rep. Steven Horsford (D-NV) posted “Three months ago, I told the Ways and Means Committee we needed to get digital asset tax policy right, not just get it done. Today, after months of bipartisan work, the committee advanced H.R. 10357 by a 38-5 vote. I was proud to cosponsor the bill and help move this forward.”
Rep. Steven Horsford (D-NV) posted “Digital assets have evolved. Our tax code needs to catch up. Today’s bipartisan vote moves us closer to clear, workable tax rules for everyday transactions, including qualifying stablecoins and small network and transaction fees. I’ve worked to make sure this framework delivers clarity while putting basic guardrails in place.”
Rep. Steven Horsford (D-NV) posted “Today, the Ways and Means Committee advanced legislation that builds on the work I started with the PARITY ACT to modernize outdated tax rules and put stronger protections in place for consumers and investors. Digital assets can help more Americans build wealth, but only if we have clear rules, real accountability, and a system that works for everyday people, not just those at the top. That’s what I’ll keep fighting for.”
Rep. Mike Kelly (R-PA) said, “Digital assets are an increasingly important part of our economy, and the Digital Asset Tax Certainty Act allows our tax code to keep pace with innovation. This legislation provides a clear roadmap for Americans who use digital assets, and it establishes rules of the road for taxation and enforcement without granting special treatment.” (Press release)
In a House Foreign Affairs Subcommittee on Middle East and North Africa hearing on the evolving terrorism landscape and U.S. counterterrorism response, Rep. Brad Sherman (D-CA) said, “I’m going to serve that we need to follow the money and that will become far more difficult if crypto actually becomes a currency. It literally means cryptocurrency, it literally means hidden money.”
Ways and Means Committee posted “After more than a year of bipartisan work, the Ways and Means Committee is marking up the first-ever tax framework for digital assets, bringing much needed tax certainty to this growing part of our economy. Today’s markup also includes legislation to strengthen tax administration, expand access to lifesaving health care, crack down on forced labor in critical mineral supply chains, and support hardworking moms and families.”
Ways and Means Committee posted “LIVE NOW: After more than a year of bipartisan work, the Ways and Means Committee is marking up the first-ever tax framework for digital assets, bringing much needed tax certainty to this growing part of our economy.”
Ways and Means Committee posted “PASSED: The Ways and Means Committee just passed the Digital Asset Tax Certainty Act — a historic step toward establishing a clear tax framework for digital assets. Through strong bipartisan collaboration, Republicans and Democrats came together to modernize outdated tax rules that have failed to keep pace as digital assets become part of everyday life for millions of Americans, putting them on a level playing field with traditional financial assets.”
Rep. Rudy Yakym (R-IN) posted “In 2025, the digital asset market hit $3 trillion, and as many as 30% of American adults own digital assets. But the tax code hasn’t caught up. That’s why I’m proud Committee advanced Chairman RepJasonSmith’s Digital Assets Tax Certainty Act. It gives crypto owners clear guidelines and treats digital assets like other financial assets. Clear rules of the road. That’s how this industry keeps growing — here in America, not somewhere else.”
Rep. Max Miller (R-OH) posted “We say we want to make the United States of America the crypto capital of the world—and this bill makes sure that goal isn’t just a bunch of hot air. I am proud of the work we have put into this legislation and for the inclusion of my bill, the Full House Act.”
Rep. Adrian Smith (R-NE) posted “If America wants to remain the crypto capital of the world, we need clear rules of the road that encourage innovation. Today, WaysandMeansGOP advanced the Digital Asset Tax Certainty Act, marking an important first step toward delivering a tax code built for today’s modern economy.”
Rep. Mike Kelly (R-PA) posted “I’m proud to support the Digital Asset Tax Certainty Act, which passed WaysandMeansGOP today. Digital assets are an increasingly important part of our economy, and the Digital Asset Tax Certainty Act allows our tax code to keep pace with innovation. This legislation provides a clear roadmap for Americans who use digital assets, and it establishes rules of the road for taxation and enforcement without granting special treatment. The Digital Asset Tax Certainty Act also includes my legislation, the Charitable Deductions for Digital Asset Donations Act, which would allow for widely traded digital assets to be eligible for charitable contributions.”
Rep. Lloyd Doggett (D-TX) posted “With soaring prices from Trumpflation, tariff taxes, and a reckless war, Americans are hardly prioritizing new tax breaks for crypto. Crypto poses the same threat to our financial system as kryptonite to Superman. Yet after spending a quarter of a billion dollars in the last congressional election, benefiting some and intimidating many, the crypto industry got the preferential tax treatment they wanted. And Republicans crafted their bill to ensure that Trump can continue to rake in billions from crypto by trading off the public trust. I spoke out forcefully against this corrupt wrong.”
Rep. Jason Smith (R-MO) posted “Today, I was proud to pass the Digital Asset Tax Certainty Act out of the Ways and Means Committee, providing the first ever tax framework for digital assets. Providing greater certainty in our tax code for the treatment of digital assets is critical to ensuring the United States is the crypto capital of the world, and I appreciate that his was a strong, bipartisan effort that has tremendous economic and innovative potential for our nation.”
Rep. Brendan Boyle (D-PA) said, “This is really maybe the first or second inning of the work that this committee and Congress needs to do when it comes to crypto, and the blockchain writ large.” (Punchbowl)
Senate Finance Chair Mike Crapo (R-ID) said, “I’ve thought that we would end up with a year-end bill for months. I think that’s becoming a little bit questionable, but I just don’t know yet.” (Punchbowl)
Sen. Steve Daines (R-MT) said, “It’s easier to steer a bus that’s moving versus one that’s parked. So the fact there’s movement and they’ve had a vote is a good step forward.” (Punchbowl)
Sen. Cynthia Lummis (R-WY) posted “Glad crypto policy is moving forward in the House this week. WaysandMeansGOP is marking up its crypto tax bill for clearer, more certain tax rules, and FinancialCmte is marking up my Strategic Bitcoin Reserve bill. The fight for American leadership in Bitcoin and digital assets will not end.”
Miscellaneous
Rep. Ronny Jackson (R-TX) posted “Iran’s terror proxy network is getting richer and MORE DANGEROUS. The Houthis have built a MULTIBILLION-dollar financial machine through ports, oil, smuggling, crypto, and sanctions evasion—fueling their ability to threaten Americans and global commerce. POTUS and HouseGOP are fighting to cut off the money that funds terror and TAKE ACTION to ensure Americans are SAFE. Terrorists should fear America. NOT the other way around!”
Financial Services GOP posted “Watch: RepBryanSteil in support of H.R. 8957: ‘We cannot allow Bitcoin to be held by the federal government to languish in fragmented and inconsistent custody. It poses unacceptable, unacceptable cybersecurity risks and fails to give an adequate accounting of what the federal government actually owns. This bill addresses these issues head-on. It directs the Treasury Department to centralize the custody of all Bitcoin and other digital assets seized through the final criminal and civil forfeiture, it mandates comprehensive accounting and ongoing oversight of federally held digital assets, and it mandates strong safeguards to protect these assets from cyber attacks.’”
Rep. Roger Williams (R-TX) posted “Today’s HouseSmallBiz hearing is examining how digital assets are giving America’s small businesses new ways to reach customers and compete in the modern economy. Small business owners have always adapted to new technology to stay ahead. Our job is to clear the path and make sure Main Street has the resources to succeed.”
Rep. Brian Jack (R-GA) posted “Today, as the Senate deliberates consideration of the landmark Clarity Act, I convened a bipartisan hearing entitled ‘Main Street Meets Crypto: What Digital Assets Mean for Small Businesses.’ Our hearing examined opportunities to lower costs for small businesses, reduce payment friction for entrepreneurs, and utilize this emerging technology to benefit Main Street across America. Thank you to our witnesses for your insightful testimony before our Subcommittee today! HouseSmallBiz”
Rep. Hillary Scholten (D-MI) posted “Crypto could open new doors for small businesses, but we need clear rules of the road. I joined today’s Small Business Committee hearing to talk about what Congress needs to do to support innovation while protecting consumers and entrepreneurs.”
Sen. Richard Blumenthal (D-CT) posted “Trump has been dropping cases, cutting sweetheart deals, & providing pardons across the crypto industry. Enabling this crypto corruption directly undermines our national security.”
Rep. Derek Schmidt (R-KS) posted “The House passed the GUARD Act, bipartisan legislation to protect older Americans from financial fraud and scams. I was proud to cosponsor this bill, which gives state, local, and Tribal law enforcement more tools to investigate fraud - including sophisticated cryptocurrency scams targeting seniors. Our seniors earned their savings. We must do everything we can to protect them.”
Sen. Cynthia Lummis (R-WY) posted “Proud of my longtime staffer, Chris Land, for being named one of The Hill’s 25 Most Notable Hill Staffers of 2026. He has led our digital assets efforts and served as the lead policy staffer on the GENIUS Act and Clarity Act negotiations. Congrats, Chris!”
Sen. Cynthia Lummis (R-WY) posted “Today’s proposed rule by fdicgov will breathe new life into the dual banking system. Thank you Chairman Hill for your commitment to state banking, including digital assets and responsible innovation.”
What I’m Reading This Week
How process and industry strangled the Clarity Act, Brendan Pedersen, Punchbowl.
About Zero One Strategies
Zero One Strategies is a specialized government relations practice dedicated to navigating the complex landscape of U.S. federal policy in emerging technologies. As advancements in technology continue to outpace regulatory frameworks, Zero One Strategies aims to provide strategic guidance and bipartisan advocacy for innovators and businesses operating at the forefront of technological development.
The practice focuses on key areas such as artificial intelligence, digital assets, blockchain, decentralized technologies, cybersecurity, data, and digital infrastructure, as well as the multiple policy issues impacting these sectors, including tax and financial services.
Contact us at Stacey@ZeroOneStrategies.com
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