President Donald Trump wants to give crypto operators greater bank access, the Securities and Exchange Commission (SEC) wants to let crypto operators tokenize securities, and crypto campaign funders want you to forget crypto exists.
The Senate Banking Committee approved its digital asset market structure bill (the so-called CLARITY Act) last week, but it’s anyone’s guess as to when the bill will be reconciled with the version that the Agriculture Committee approved in January, and then sent to the Senate floor for a vote by the full body.
Word broke Thursday that the Senate was getting a head start on the Memorial Day weekend by going home early, with no plans to return until Monday, June 1. Meanwhile, the Congressional calendar keeps shrinking, and the number of more substantive and even more contentious bills still awaiting debate/votes grows longer by the day.
Recall that Congress will go home in August for its usual summer recess, and after that, the focus will turn to November’s midterm elections, as one-third of senators must take their turns pretending to care about their constituents every six years.
The entire House of Representatives will also be in campaign mode, and the House has its own roster of bills to deal with, never mind confirming the Senate’s version of CLARITY as is, without further tweaking (which would require a return trip to the Senate for yet another vote).
In other words, the White House’s preferred timeline for CLARITY getting to Trump’s desk for signing into law by July 4 now looks even more implausible. In the meantime, other subjects are occupying Washington’s crypto minds.
This past weekend, White House crypto advisor Patrick Witt told The Wolf of All Streets podcast that there’d been “a breakthrough” on the federal government’s plans to codify its Strategic Bitcoin Reserve (SBR), aka all the BTC tokens the government has amassed over the years from seizures and forfeitures.
In March 2025, Trump issued an executive order creating the SBR and the Digital Asset Stockpile, the latter consisting of all other tokens currently in the government’s possession. A full audit of the government’s crypto holdings was supposed to have been completed and issued by April 2025, but this accounting has yet to emerge.
Calls for that audit grew louder earlier this year after news broke that one of the contractors hired by the feds to custody the government’s digital assets had stolen $46 million worth of the tokens. The thief was soon nabbed, but the brouhaha did little to bolster confidence in the government’s ability to safeguard these assets.
Witt told the podcast there would be “an announcement” re the SBR soon, although it’s been nearly a week since then and still no details. Witt did tease the imminent release of a new bill to codify the SBR into law, and Thursday delivered the goods via the new American Reserve Modernization Act (ARMA), courtesy of Rep. Nick Begich (R-AK), with bipartisan support from Rep. Jared Golden (D-ME).
Begich claims ARMA “ensures digital assets in the possession of the federal government will be consolidated across government and protected as a reserve asset for future generations, protecting these assets from the whims of Congress or future administrations.”
The bill would prevent the sale of any of the government’s BTC for at least 20 years. Begich called the government’s tokens “a critical component of our nation’s insurance policy, bolstering our currency and providing assurance during times of uncertainty.”
Sen. Cynthia Lummis (R-WY) will reportedly introduce companion legislation in the Senate. While the bill is a fairly simple ask, that’s no guarantee of it passing in the current political climate, even if there wasn’t an election looming. Best guess is it gets attached to some other piece of must-pass legislation at the last second and hopefully rides that pony across the finish line.
SEC loves innovations, exemptions, tokenizations
The Securities and Exchange Commission (SEC) was in the headlines this week after Bloomberg reported that the regulator was planning to announce its latest “innovation exemption.” This one will allow crypto firms to tokenize the stocks of public companies, including companies who aren’t all that enthused about pseudo-versions of their shares circulating in the wild.
The SEC has yet to confirm the report, but Bloomberg claims the SEC won’t prevent crypto platforms from offering tokenized shares of companies that want no part of this third-party proxy betting market. But the SEC will reportedly require decentralized exchanges to provide tokenized stock traders with the same benefits (voting rights, dividends, etc.) enjoyed by investors who purchase/trade the stocks on traditional securities exchanges (quite how remains to be seen).
It’s not like this phenomenon isn’t already happening. Traditional forums such as the New York Stock Exchange and the Nasdaq have been steadily embracing the idea of tokenizing stocks. Just this week, Elon Musk’s SpaceX filed its initial public offering paperwork, and prominent digital asset exchanges like Binance and Bitget promptly launched perpetual futures products based on SpaceX’s performance.
While we still don’t know the SEC’s actual intentions, we do know that the regulator has been bending over backward to demonstrate the distance between itself and the crypto-skeptical approach the SEC displayed under the Biden administration.
This vibe shift has resulted in a significant decline in the SEC’s crypto-related investigations/enforcement actions, but is now extending retroactively to legal settlements the Biden-era SEC reached with those who tried to color outside the regulatory lines. Read on…
SEC rescinds ‘don’t say you was framed’ policy
On May 18, the SEC rescinded a longstanding policy that prohibited companies who’ve been on the receiving end of an SEC legal settlement from publicly denying the allegations once the deal is signed and the penalty is imposed/paid. SEC Chair Paul Atkins claimed to be acting out of concern for 1st Amendment rights to free speech, including speech that criticizes the government.
Almost immediately, Kathleen Fraher, former chief risk officer at the defunct Silvergate Bank, tweeted her denials that Silvergate ran a shoddy anti-money laundering (AML) compliance program. Fraher reached a settlement with the SEC in July 2024 without admitting or denying the SEC allegations, but under these new rules, she’s making up for lost time.
Silvergate was a crypto-friendly U.S. bank that went belly-up following the late-2022 implosion of Sam Bankman-Fried’s FTX exchange, which relied on Silvergate to channel U.S. customer deposits to the Bahamas-based FTX.com. Many of these transfers were distinctly not above board, but Silvergate appeared to look the other way and had no seat to sit on when the fiduciary music abruptly stopped.
Fraher now says “at no point has any regulatory agency proven that our AML controls failed or that wrongdoing went undetected.” Fraher said she was advised to settle with the SEC “so I could move forward” and claims to still be living with “the structural consequences of this enforcement action.” This includes “a significant financial penalty paid” and “very real limitations to my professional trajectory and executive options.”
While Fraher has yet to seek reimbursement for her allegedly improper prosecution, other crypto operators are already lining up with their hands out. The Bittrex exchange, which shut its digital doors in 2023 after paying $24 million to settle its SEC complaint (plus another $29.3 million to the Department of Justice (DOJ) for dodgy sanctions compliance), is now asking the courts to vacate its SEC settlement and return that $24 million.
The May 4 filing (in fairness, two weeks before the SEC’s rescinding announcement) with the U.S. District Court for the Western District of Washington claims the SEC’s “erroneous” allegations against Bittrex—that it had offered digital asset securities trades to customers without registering as a securities broker—is “a position the SEC explicitly has abandoned.” With the SEC having “done an about-face” on the whole ‘tokens are securities’ thing, Bittrex wants the court to vacate its 2023 settlement and refund its $24 million.
Tune in next week, when Bittrex (and every other crypto operator who got caught doing the nasty) files for its share of the $1.776 billion in taxpayer funds that Trump is setting aside for individuals and entities that “suffered weaponization and lawfare” at the hands of the previous administration.
Bank shot
On May 19, Senate Banking Committee ranking member Elizabeth Warren (D-MA) sent a letter to Jonathan Gould, who heads the Treasury Department’s Office of the Comptroller of the Currency (OCC), asking him to clarify his “decision in recent months to grant national trust charters to seemingly ineligible companies, in apparent violation of the National Bank Act.”
Warren noted that Gould has approved the applications of “at least nine national trust charters for crypto companies that intend to engage in activities that appear to go far beyond the narrow set of activities permitted by law.”
The recipients of these crypto charters, which Gould began issuing last December, include familiar names like Bitgo, Circle (NASDAQ: CRCL), Crypto.com, Ripple Labs and Paxos. Others, like the Trump-linked World Liberty Financial (WLF) and Kraken, are awaiting approval of their applications.
Warren wants Gould to provide “detailed information regarding your decision to approve these charters” and info on his plans to ensure these new banks comply with the law. But with the Dems in the minority in Congress, Gould isn’t likely to dignify Warren’s request with any kind of response other than ‘meh.’
The week before Warren’s letter, the OCC gave conditional approval to German payments firm Augustus (formerly Ivy) to establish the Dallas-based Augustus Bank N.A. as a full-service U.S. national bank. Augustus, which already serves crypto operators like Kraken, is pitching its new status as “the world’s first clearing bank for the AI era, built on a stablecoin and AI-native core.”
The same day as Warren’s letter, President Trump issued an executive order on Integrating Financial Technology Innovation into Regulatory Frameworks. The order called on the federal government to “update regulations to allow integration of digital assets and innovative technology into traditional financial services and payment systems.” Trump also wants the gatekeepers to “remove overly burdensome and fragmented regulations and supervisory practices that form barriers to entry and primarily benefit incumbent financial services firms.”
The EO namechecks “digital asset-related services” and “blockchain-based services” as among the fintechs that are to be relieved of the apparently excessive regulatory obstacles preventing them from moving Americans’ money around.
But the EO also instructs the Board of Governors of the Federal Reserve System to conduct “a comprehensive evaluation of the legal, regulatory, and policy framework governing access to Reserve Bank payment accounts and payment services by uninsured depository institutions and non-bank financial companies, including those engaged in digital assets and other novel financial activities.”
The day after Trump’s EO, the Fed issued a request for public comment on its “proposal to establish a ‘payment account,’ which legally eligible financial institutions could use for the specific purpose of clearing and settling their payments” without the need for intermediary partner banks.
The Fed has occasionally referred to these new ‘payment’ accounts as ‘limited purpose accounts’ based on their restrictions on accessing certain Fed services, like discount window borrowing, daylight overdraft privileges, etc.
In March, Kraken’s Wyoming-registered special depository institution (SPDI) made history by becoming the first digital asset bank to gain access to one of these ‘skinny/payment/limited’ accounts.
However, the Fed said this week that it had asked its Reserve Banks to “temporarily pause decisions on access requests from institutions that fall within Tier 3 [most crypto firms fall into this category] of the Board’s Account Access Guidelines until the Board has completed its policy development process on the payment account proposal.”
Earlier this month, Kraken’s parent company, Payward, filed its OCC charter application to establish Payward National Trust Company and “provide fiduciary custody and other services primarily for digital assets” on behalf of institutional clients.
Payward’s application brought fresh warnings from the Independent Community Bankers of America (ICBA), who aren’t wild about the “growing convergence of crypto firms seeking greater access to the federal banking system … without comparable regulation as banks.” Individually, the crypto applications raise “serious policy questions” but taken as a whole, “they raise interconnected risks, weaken long-standing guardrails, and create new channels for instability and consumer harm.”
PAC attack
This week brought the first recorded activities of the Blockchain Leadership Fund (BLF), the new political action committee (PAC) announced in March with financial support from crypto custodian/bank/stablecoin issuer Anchorage Digital, and the Chainlink Labs tokenization crew.
The BLF’s first round of endorsements features a bipartisan mix of Senate and House candidates, in keeping with the group’s stated mission of electing officials who “understand the importance of keeping digital asset innovation in the United States … and ensuring the industry has a clear framework for responsible growth.”
The statement featured quotes from two unidentified spokespeople, with Anchorage’s mystery rep saying the company believes “constructive bipartisan participation is critical to ensuring the U.S. remains a global leader in financial technology and the future of finance.” The Chainlink rep added that “sustained bipartisan leadership will play an important role in keeping the United States at the forefront of financial innovation.”
BLF’s Federal Election Commission (FEC) filings show the group had $175,000.66 to spend as of March 31. The BLF’s statement didn’t indicate how much cash each of its selected candidates received in campaign contributions.
This week also saw a number of Congressional primary votes, after which certain crypto-focused PACs were celebrating the victories of all six candidates—five Republicans, one Democrat—they’d backed with a combined $20 million.
The $20 million came courtesy of Fairshake—the PAC backed primarily by Coinbase, Ripple Labs, and the Andreessen Horowitz (a16z) (NASDAQ: ZADIHX) venture capital group—and its two partisan offshoots: the GOP-supporting Defend American Jobs, and its Democratic counterpart Protect American Progress.
While Fairshake was quick to celebrate having ‘run the table’ in this week’s primaries, it’s worth noting that all five GOP candidates had already secured Trump’s personal endorsement, which carries much more weight than any competing bankroll.
And Fairshake and its affiliates spent nearly $10 million in March in a failed bid to thwart the Senate primary campaign of Illinois crypto skeptic Juliana Stratton, who is now all but assured to win her Senate seat this November.
As usual, none of Fairshake’s messaging for any of its chosen candidates or against those candidates’ opponents made any mention of digital assets, reflecting the growing awareness that voters despise crypto-focused PACs.
Fairshake ended April with nearly $150 million in cash on hand, three times the $49.8 million the PAC has spent since the year began and significantly more than the $130 million it spent during the 2024 election cycle. But the PAC’s support of any candidate who supports crypto, regardless of party affiliation, is starting to annoy Republican operatives.
This week, Axios reported that GOP figures were pissed that Fairshake et al aren’t showing them enough gratitude, given that most of the regulatory and legislative progress the sector has made over the past 16 months has been due to the GOP flexing its Congressional majorities and Trump appointing extremely pliant regulatory chiefs.
The GOP wants Fairshake to go on offense against Sherrod Brown, the Democrat from Ohio who’s trying to win back his Senate seat after Fairshake spent $40 million to oust him in November 2024. Brown was a vocal crypto critic at the time, but his resurrection campaign has him promising to “keep an open mind” on crypto issues.
With Democrats a decent bet to retake either the House or the Senate (or both) this November, the GOP believes this is no time for Fairshake et al to straddle the political fence. The GOP also wants to know how/where crypto PACs will spend so that the party can more effectively allocate its own funds.
Survey says…
Fairshake never mentions crypto in its ads for obvious reasons: the industry’s longstanding claims of the fabled ‘crypto voter’ are straight-up fabrications. A Politico poll earlier this month found that just 4% of U.S. voters cared about a candidate’s crypto stance. The survey also showed nearly twice as many voters want Congress to crack down harder on crypto operators rather than ease up.
But these grim facts haven’t stopped the crypto sector’s messaging. The Ripple-funded National Cryptocurrency Association (NCA) released its latest ‘State of Crypto Holders Report’ this week, and its claims are as grandiose as ever.
The NCA claims 67 million Americans, roughly one-quarter of U.S. adults, own some form of cryptocurrency, up from one-fifth of U.S. adults in last year’s report. The report also claims that 28% of American adults aged 55+ hold some kind of digital asset, twice their ownership share in 2024.
Now consider the Federal Reserve’s latest Economic Well-Being of U.S. Households in 2025 report, which found that just 10% of American households had made “any use of cryptocurrency” last year.
While those who admitted buying or holding digital assets as an investment inched up two points to 9%, only 2% said they’d used crypto “to buy something or make a payment” and only 1% used crypto to “send money to friends or family.” These latter two stats were unchanged from the previous survey.
Even among those who said they’d used crypto for a financial transaction, the largest slice (26%) said they’d only done so because the “person or business receiving the money preferred” to be paid in tokens.
The report noted that ‘unbanked’ individuals were three times more likely (6%) to have used crypto for financial transactions than those with traditional bank accounts. Those who used non-bank check-cashing or money orders were four times as likely (8%) to transact in crypto.
Regardless, it’s hard to resolve the discrepancies between these two reports. Crypto skeptics will point to the NCA’s obvious bias in phrasing its questions and selecting its audience, while crypto diehards would likely counter with their view that the Fed isn’t exactly an impartial observer in this fight.
But if crypto PACs truly believed the NCA figures were real, it stands to reason that they would feel a lot more comfortable about mentioning crypto in their ads. And since they don’t, we suspect they don’t believe those inflated figures either.
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