This week decoded
The CFTC is in a busy stretch - in addition to tackling market structure clarity, it issued an informational advisory limiting when prediction markets can offer “mention” contracts and updated its FAQs Concerning Registrant and Registered Entity Activities Relating to Crypto Assets and Blockchain Technologies. It also launched a new Frontier Forum Series, a set of public roundtables on the technologies transforming American financial markets.
The Fed issued long-awaited proposed GENIUS Act regulations on reserve limits and capital standards.
“Crypto Mom,” SEC Commissioner Hester Peirce, announced she will step down on October 2.
Postmortems continue across Washington on the CLARITY Act’s failed procedural vote. With the midterms just a few weeks away, House members home campaigning, and the Senate eyeing the exits to do the same, a brighter spotlight is being directed on the role of political giving in high-profile, contentious policymaking.
Read more below
Congress
Legislation
Sen. Steve Daines (R-MT) is expected to soon introduce his digital asset tax bill. (Punchbowl)
Reps. Valerie Foushee (D-NC) and James Moylan (R-GU) introduced the Stopping Abuse and Fraud Enabled by Platforms Act (SAFE Platforms Act) to establish liability for online platforms that knowingly help create or spread fraudulent content and require platforms to configure default privacy-protective settings and prohibits a single “master setting” that would weaken all default privacy protections at once, detect and prevent the creation of fraudulent accounts and profiles and implement design features to prevent deceptive or misleading advertising practices, and provide users with basic “know your customer” (KYC) information about advertisers, including their legal name, location, and length of time on the platform, and require additional verification for accounts that will be used for commercial purposes or high-risk categories like financial services, health products, housing, gambling, cryptocurrency, and age-restricted goods. (Text)
Correspondence
Senate Banking, Housing, and Urban Affairs Committee Ranking Member Elizabeth Warren (D-MA) sent a letter to Treasury Secretary Scott Bessent and Attorney General Todd Blanche requesting the Trump Administration investigate national security risks posed by World Liberty Financial and any of its affiliated entities. (Letter)
Publications and Events
The Congressional Research Service (CRS) published a report entitled “Judicial and Administrative Developments in the Tax Treatment of Digital Assets.” (Report)
Trump Administration
Securities and Exchange Commission (SEC)
SEC Commissioner Hester Peirce announced she will step down from her position on October 2, 2026. (Letter)
Commodity Futures Trading Commission (CFTC)
The CFTC issued an informational advisory limiting when prediction markets can offer “mention” market contracts. The advisory says markets that allow users to bet on whether a public individual will attend an event, make a particular remarks, or interact with another person in public present “a heightened risk of manipulation because their settlement turns on the discrete conduct of a person that may be neither independently generated nor externally verifiable.” (Press release)
The CFTC’s Market Participants Division, Division of Market Oversight, and Division of Clearing and Risk released updates to the FAQs Concerning Registrant and Registered Entity Activities Relating to Crypto Assets and Blockchain Technologies to address investments of customer funds in tokenized forms of permitted investments and the use of blockchain technologies to satisfy a registrant’s recordkeeping requirements. (Press release)
The CFTC’s Innovation Task Force announced it will host a Frontier Forum Series of public roundtables on the technologies that are transforming American financial markets. The first Frontier Forum will focus on artificial intelligence and agentic finance on October 28, 2026. (Press release)
Federal Reserve
The Fed issued long-awaited GENIUS Act proposed regulations on stablecoin reserve limits and capital standards for stablecoin issuers it supervises. (Press release)
Vice Chair for Supervision Michelle Bowman announced initial findings of an independent review of the failure of Silicon Valley Bank. (Remarks)
Noteworthy Quotes
ADMINISTRATION
White House
Speaking at the Psaros Center for Financial Markets and Policy about the current status of the CLARITY Act, Executive Director Patrick Witt said, “It’s still raw for me.” (Punchbowl)
On combining separate bills from the Senate Agriculture and Banking committees, Witt said it was “not twice as complicated; it’s orders of magnitude more complicated.” (Punchbowl)
On negotiating with Senate Democrats, Witt said, “It was always difficult for us to know, who are we negotiating with when someone says our caucus has concerns about this? Who within the caucus, that group of 12, cares about that issue?” (Punchbowl)
On banking sector opposition, Witt said, “Two things cannot be true. You either absolutely need to restrict stablecoin rewards — which your effort successfully defeated the effort that would have put restrictions on stablecoin rewards — or you were not being genuine with your advocacy.” (Punchbowl)
On CLARITY Act consideration during the lame duck, Witt said, “You’re talking about a post-election lame-duck effort, which is entirely dependent upon the outcome of the election itself. If Republicans were to keep both chambers, OK, maybe Democrats kinda back off the politics of it and some of that pressure has abated. If it’s split, it’s a question mark. If it’s both chambers in Democrats’ hands, I think odds would be very low.” (Punchbowl)
Witt posted “End of an era! Thank you, HesterPeirce, for your many years of service fighting for sound crypto policy at the SEC. The impact of your tenure at SECGov will only grow over time as global capital markets accelerate their move on-chain.”
Witt also posted “A big thank you to SummerMersinger for her years of service advancing crypto policy and financial innovation, first at the CFTC, then leading BlockchainAssn. It’s been a pleasure working with Summer these past two years. We would not have achieved all that we did without her leadership and partnership.”
Commodity Futures Trading Commission (CFTC)
Chair Mike Selig posted “Pleased to see staff update these frequently asked questions consistent with the agency’s ongoing efforts to provide regulatory clarity for the crypto industry.”
Selig also posted “It’s GO TIME. The CFTC is utilizing its existing statutory authorities to establish a crypto asset regulatory market structure. POTUS promised clear rules of the road for crypto and we are shipping them.”
Securities and Exchange Commission (SEC)
U.S. Securities and Exchange Commission posted “Jamie Selway (SEC Director, Division of Trading & Markets) on BloombergTV ‘Tokenization & crypto have been politicized recently. But it’s not naturally a politicized function . . . Success of the country in terms of developing these markets should have good bipartisan support.’”
Treasury Department
In remarks at the New York Fed’s Treasury Market Conference, Deputy Treasury Secretary Francis Brooke said about stablecoins after GENIUS Act implementation, “More important than their current holdings is the significant growth opportunity that they represent in the coming years. As the rules implementing the GENIUS Act are finalized, we may see stablecoin providers continue to grow and add to their holdings of Treasury securities.” (Remarks)
CONGRESS
Digital Asset Tax
Senate Finance Chair Mike Crapo (R-ID) said about Digital Asset Tax Certainty Act approved by the House Ways and Means Committee, “We’re going to give it a thorough review. We may want to tune it up. I’m not telling you whether we will revise it or not — I don’t know.” (Politico)
Crypto Political Giving Post-CLARITY
On the crypto industry’s political giving strategy, Sen. Cynthia Lummis (R-WY) said, “To reward people who voted against the motion to proceed on Clarity after the Democrats got 126 amendments in the bill would be a huge mistake.” (Politico)
On the crypto industry’s Fairshake PAC targeting the OH Senate race, Sen. Ben Ray Luján (D-NM), said it has “been the goal of Republican colleagues all along to try to get folks to invest in races, versus them trying to get a piece of legislation done, and someone needs to call the Republicans out on their bullshit. Sherrod’s gonna win.” (Politico)
Sen. Bernie Moreno (R-OH) said Fairshake “should have done it earlier.” (Punchbowl)
Sen. Elizabeth Warren (D-MA) said, “People across this country are sick of a handful of billionaires who think they can buy every election. The 2026 midterms will put that issue squarely on the table,” Warren said. “Do you want someone to represent whatever the billionaires and Donald Trump wants? Or do you want someone to represent you?” (Punchbowl)
More to Say on CLARITY
Sen. Cory Booker (D-NJ) said “I thought that they were trying to work for a bipartisan solution. We were so close. Clearly, this seems like a very partisan take, and maybe, perhaps, it reveals that a lot of their protestations — that this was a bipartisan effort — are not valid.” (Punchbowl)
Sen. Raphael Warnock (D-GA) said, “We were trying to get a bill done. This is a hugely unregulated part of our economy. We need to pass a bill. But the idea – I mean, it’s the Republicans who died on the hill of Trump corruption.” (Punchbowl)
Sen. Andy Kim (D-NJ) said, “I’m still willing to have these conversations and talk. You guys are talking as if things are just totally dead and buried.” (Punchbowl)
Sen. Cynthia Lummis (R-WY) said, “It’s like a battery with acid. That acid corrodes the containers that carry it. And the Democrats, at this point, are corroded by their hatred for Trump. That’s what drove that completely, 100% partisan vote. They own it.” (Punchbowl)
Lummis posted “Democrats wanted federal consumer protections for crypto ATMs to protect seniors from scammers. The Clarity Act delivers those comprehensive protections. Democrats voted no on protecting seniors from ATM fraud.”
Lummis also posted “Democrats asked for major crypto holders to disclose their stakes and report sales to the SEC and the public. It’s in the Clarity Act. Democrats voted against the same disclosure rules they wrote.”
Lummis also posted “Democrats wanted crypto issuers held to the same fraud liability standard as every other securities filer. The Clarity Act applies Securities Act Section 17(a) liability to digital asset disclosures. Democrats still voted no.”
Under the headline “Rural Kansans Rely on Community Bank Services” in a constituent newsletter, Sen. Jerry Moran (R-KS) wrote, “On Tuesday, the U.S. Senate voted against advancing the Digital Asset Market Clarity Act, legislation that would establish regulatory framework for digital commodities. I support the need to regulate digital assets and make sure protections are put in place to counter crypto scams. That is why I introduced the bipartisan Strengthening Agency Frameworks for Enforcement of Cryptocurrency (SAFE Crypto) Act, which would establish an inter-governmental task force between federal agencies and the private sector to coordinate identifying and combating cryptocurrency fraud. Ultimately, I voted no on the Clarity Act after months of concerns I have heard from rural Kansans about the consequences this legislation would have for our rural communities. I will continue working with my colleagues to find a path forward that protects our communities and provides sensible policies that support responsible innovation while maintaining appropriate safeguards.” (Newsletter)
Miscellaneous
Sen. Cynthia Lummis (R-WY) posted “Hester Peirce stood up for American innovators long before it was popular, and the digital asset industry owes her a debt it can never fully repay. Thank you, Hester, for years of dissenting against regulation by enforcement and leading the SEC’s Crypto Task Force to bring clear rules back where they belong. Wishing you all the best in your next chapter.”
Rep. Gabe Vasquez (D-NM) posted “This report confirms what I have been saying all along — unregulated and illegal prediction markets violate Tribal sovereignty and are a threat to economic development, education, and child services for our Pueblos, Tribes, and our state.”
Rep. Lloyd Doggett (D-TX) posted “Crypto is great for tax evasion. There is no good reason for excluding crypto platforms from filing IRS Form 1099 like other securities dealers. And an exclusion costs $4 billion of estimated tax cheating. Last week, GOP, always obedient to Trump, said cheat on by rejecting my amendment. Easier for them to talk against fraud than actually take meaningful steps to stop it.”
Rep. Hillary Scholten (D-MI) posted “Small businesses shouldn’t have to figure out new technology on their own. Digital assets like cryptocurrency are becoming more common, but that doesn’t mean every Main Street business has the time or resources to understand the risks, benefits, taxes, and security questions that come with them. That’s why I introduced the COIN Act: to give small business owners clear, reliable information so they can make informed decisions about whether digital assets make sense for their business.”
Sen. Chris Murphy (D-CT) posted “Here’s some unsolicited advice for my Democratic friends - in office and running. Think twice before hiring consultants who are cozying up to private equity, signing up to defend prediction markets, or telling candidates to not say what they actually feel about the big AI companies. A public backlash is growing against the predatory companies that try to erase our jobs and monetize everything not nailed down. They want leaders who are going to unapologetically fight back. Democrats should seize that humanist mantle. And it matters who we work with.”
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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