It's Time for Clarity. Is the Senate Ready?

CRYPTO IN AMERICA ·

What you'll read: Ethics and the Blockchain Regulatory Certainty Act remain the biggest obstacles to getting the Clarity Act to the Senate floor, and signs of progress remain scarce; is a former CFTC commissioner getting a look for the SEC? Kraken reignites the Operation Chokepoint 2.0 conversation, and former SWIFT CIO Tom Zschach joins the podcast. As the final week of the July 4 recess winds down, the crypto industry is watching for signs that negotiators made enough progress behind the scenes to clear the way for a Senate floor vote on the Clarity Act later this month. Before the break, one of the bill's lead negotiators, Senator Cynthia Lummis (R-WY), said updated compromise text would be released during the recess to give industry stakeholders time to review it ahead of a potential floor vote. But with lawmakers set to return next week, no revised text has emerged. What do we know? Publicly, not much. But sources close to the negotiations say discussions have continued in recent days between Trump administration officials and law enforcement groups over the fate of the Blockchain Regulatory Certainty Act. The provision has emerged as one of the most contentious pieces of the legislation and is widely viewed as key to securing bipartisan support on the Senate floor. As Crypto In America reported last week, one group, the National Organization of Black Law Enforcement Executives (NOBLE), officially endorsed the legislation, while another, the Major County Sheriffs of America (MCSA), shifted its position from opposed to neutral. But other influential organizations, including the National Sheriffs’ Association, National Association of Police Organizations, and the Fraternal Order of Police, have yet to signal their support. Whether they ultimately come on board, and whether doing so will require further revisions to the legislation, remains to be seen. Why does law enforcement support matter? Some Democrats, including Senators Catherine Cortez Masto (D-NV) and Mark Warner (D-VA), have indicated their support for the bill is contingent on adequately addressing law enforcement's fears that the BRCA could create gaps in their ability to investigate and prosecute illicit activity. At the same time, there are concerns that some Republican senators may also hesitate to back the legislation if major law enforcement organizations remain opposed. At least one Democrat is publicly backing the provision. In a welcome development for the crypto industry on Wednesday, Senator Ron Wyden (D-OR) sent a letter to Senate leaders urging them to preserve the BRCA, as passed by the Senate Banking Committee, in any version of the Clarity Act brought to the floor. Blockchain Association @BlockchainAssn Thank you Sen. @RonWyden for your leadership and for making clear that developer protections and law enforcement can – and must – work together. Preserving BRCA is essential to getting Clarity right: protect developers, preserve enforcement tools, and keep innovation in America. Eleanor Terrett @EleanorTerrett 🚨NEW: Senator @RonWyden (D-OR) is asking Senate leaders to preserve the Blockchain Regulatory Certainty Act, as passed by the Senate Banking Committee, in any version of the Clarity Act brought to the floor. It comes amid uncertainty over whether certain key law enforcement 8:19 PM · Jul 8, 2026 · 9.4K Views 2 Replies · 41 Reposts · 191 Likes Wyden, who co-introduced the standalone BRCA with Senator Lummis in January, argued the provision would codify existing federal policy by making clear that non-custodial software developers should not be treated as money transmitters solely for publishing software, while preserving the DOJ’s and FinCEN’s authority to pursue illicit actors. Whether that support extends to the broader Clarity Act remains unclear. Wyden has opposed previous crypto legislation, voting against both the GENIUS Act and the congressional resolution overturning the IRS’s DeFi broker rule. Now widely viewed as the biggest question mark hanging over the bill, any sign of an ethics agreement with the White House remains elusive. Multiple industry participants told Crypto In America they believe an ethics agreement is the key to unlocking the rest of the negotiations, arguing that once ethics is resolved, other sticking points, including law enforcement support and differences over the Agriculture Committee's text, become much less likely to stand in the way of a final deal. Many echoed the same sentiment: "If we can get ethics, the rest of the bill will come together." But that’s a big if. Little is known about the parameters Democrats are now pursuing after a tentative agreement fell apart last month, when Senate Republicans and White House officials backed away from a proposal that would have allowed state attorneys general to sue the Department of Justice for failing to enforce laws preventing conflicts of interest. Before the recess, Lummis floated an alternative proposal that would instead allow state attorneys general to sue exchanges for listing tokens issued by government officials. But it remains unclear what Democrats might be willing to accept now that the earlier compromise is off the table, particularly as pressure has mounted in recent weeks following the release of the president’s latest financial disclosure, which showed he reported more than $1 billion in income from various crypto-related businesses last year. And it's not just Democrats. Some Republicans have also drawn a hard line on conflicts of interest. Senator Thom Tillis (R-NC), a key player in the negotiations who helped broker the stablecoin yield compromise between the crypto and banking industries, said in April he would vote against the legislation unless it includes ethics language. Ultimately, the fate of the Clarity Act may come down to one person: President Trump and whether he is willing to accept ethics provisions that could constrain his own crypto-related business interests. The answer to that question, and whether more than a year of negotiations culminates in a Senate floor vote this month, should become clearer in the coming days. Financial watchdog Better Markets CEO Dennis Kelleher launched an aggressive public campaign against former CFTC Commissioner Christy Goldsmith Romero on Tuesday, urging Senate Minority Leader Chuck Schumer not to recommend her for one of the SEC’s vacant Democratic commissioner seats. The attack comes as calls from lawmakers on both sides of the aisle to fill vacant minority seats at the agencies overseeing digital assets have grown louder ahead of a possible Senate floor vote on the Clarity Act later this month. The legislation would give both the SEC and CFTC expanded responsibility for overseeing the $2 trillion industry, fueling speculation that the White House is preparing to make long-awaited nominations. That speculation intensified Thursday after the White House pushed back on Senate Democrats’ claims that the administration has refused to nominate Democratic commissioners to independent agencies. In a letter to Senate leaders, the White House said it requested recommendations from Senate Democrats for vacancies at both the SEC and CFTC but “has not received names in response.” Goldsmith Romero, who was previously nominated to lead the Federal Deposit Insurance Corporation in the waning days of the Biden administration, had not publicly emerged as a contender for an SEC seat before Kelleher’s post, unlike a handful of other names that have circulated in recent months. In a blog post , Kelleher called Goldsmith Romero “unqualified and untrustworthy,” accusing her of helping pave the way for the expansion of prediction markets by backing the CFTC’s decision to drop its lawsuit against Kalshi. He also argued that her potential nomination could give Democratic senators political cover to support the Clarity Act, which Kelleher described as a “bad crypto bill.” The attack drew swift pushback from the crypto industry, with many pointing out that Better Markets and Kelleher himself had enthusiastically backed Goldsmith Romero just two years ago when she was under consideration to chair the FDIC. At the time, Better Markets described her as “uniquely highly qualified,” praising her experience across banking, securities, derivatives and law enforcement. Kelleher rejected the comparison, arguing circumstances have changed since Better Markets endorsed her in 2024. Whether Goldsmith Romero ultimately receives a nomination remains to be seen. She declined to comment when reached by Crypto In America . Kraken's parent company, Payward Inc., has asked the Delaware Court of Chancery to enter final judgment against auditing firm Forvis Mazars after winning a $22 million arbitration award over the firm's withdrawal from the exchange's nearly completed 2022 audit. According to the arbitration ruling, Mazars' exit triggered what the arbitrator described as a "licensing crisis" for Kraken, delaying its efforts to obtain state money transmitter licenses and ultimately contributing to its acquisition of TradeStation Crypto, a licensed crypto brokerage with money transmitter licenses in 47 states. In a blog post accompanying the filing, Kraken Co-CEO Arjun Sethi characterized the dispute as another chapter in what the crypto industry and Republican lawmakers have dubbed "Operation Choke Point 2.0," a term largely associated with claims that crypto firms were cut off from banking services under the Biden administration. Sethi argues the campaign extended beyond banks to auditors and other critical service providers. Kraken CEO Dave Ripley echoed that sentiment in a post on X, writing that the case is "worth surfacing" because "only a fraction of the stories from that era have ever been told," suggesting the Mazars dispute was one example of a broader effort to cut the crypto industry off from essential financial services. Dave Ripley @DavidLRipley It's been a while since we talked about Chokepoint 2.0. Kraken will enter a $22M award with the Delaware Court of Chancery -- compensation for financial harm inflicted on us by the coordinated campaign to cut crypto off from banking, auditors, and other essential services. 3:58 PM · Jul 7, 2026 · 103K Views 23 Replies · 57 Reposts · 383 Likes Mazars cited legal uncertainty following the Securities and Exchange Commission's 2023 lawsuit accusing Kraken of operating an unregistered securities exchange when it withdrew from the engagement weeks later. Sethi, however, argues the decision reflected a broader retreat from the crypto industry, noting the firm had already exited its proof-of-reserves business earlier that year. “The firm was not walking away from bad clients,” Sethi wrote. “It was walking away from an industry that had become politically expensive to serve. We were the collateral damage.” A spokesperson for Mazars did not respond to a request for comment. The SEC's lawsuit against Kraken was dismissed with prejudice in March 2025 after new leadership took over the agency under President Trump's second term and began unwinding many of the crypto enforcement actions brought during the Biden administration. Sethi argues the case illustrates why the industry is pushing Congress to pass the Clarity Act to create durable rules for crypto, rather than relying on shifting regulatory priorities from one administration to the next. “We won this fight. Now our congressional leaders from both sides of the aisle need to come together to finish the bigger one. Pass the Clarity Act,” Sethi said. Tokenization has become Wall Street’s favorite crypto buzzword, but why hasn’t it scaled? This week, we sat down with former SWIFT Chief Innovation Officer Tom Zschach to discuss the biggest hurdle facing tokenized assets today, why trust matters more than technology, and what needs to happen before traditional finance embraces tokenization at scale. We also dive into SWIFT’s role in global finance, why the long-running narrative that blockchain would replace SWIFT missed the mark, how AI is likely to reshape financial markets, and why the next chapter of finance will be built by modernizing existing infrastructure rather than replacing it. Catch the full episode on all platforms here . ICYMI: Here are some of the biggest stories making headlines this week. The SEC released its 2026 regulatory agenda , including a target timeline for “Regulation Crypto,” a potential rulemaking that could create fundraising registration exemptions for certain crypto products, establish a safe harbor for issuers, and allow limited fundraising under existing rules. Judge Analisa Torres of the United States District Court for the Southern District of New York, who also presided over the SEC v. Ripple Labs case, ruled that New York's lawsuit against prediction market platform Kalshi can proceed after finding that the state's gambling laws, as applied to Kalshi's sports event contracts, are not preempted by the Commodity Exchange Act. Kalshi has appealed the decision to the Second Circuit. Ripple partnered with Kansas Athletics to bring the XRP logo to its jerseys, marking what the school says is the first time a major college athletics program has featured a cryptocurrency brand. Asset management giant Vanguard is hiring a Head of Digital Assets for its Personal Wealth business, marking its latest move into crypto after rolling out access to spot crypto ETFs for its brokerage clients earlier this year. Crypto VC firm Paradigm raised a $1.2 billion fund focused on AI and robotics. BonkDAO suffered a $20 million hack after attackers used a malicious governance proposal to drain its treasury. The White House says work on the long-awaited Strategic Bitcoin Reserve is ongoing.

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