As America prepares to celebrate its 250th birthday, crypto operators are wondering if it will take another quarter-millennium (and possibly another revolution) for the Senate to pass digital asset market structure legislation.
America’s upcoming birthday party means there’s no action on the Senate floor for the next two weeks, but some senators are working frantically behind the scenes to advance their digital asset market structure bill (CLARITY Act). Negotiations are reportedly ongoing with a variety of stakeholders in hopes of ironing out the multiple wrinkles preventing CLARITY from making forward progress.
The main sticking point remains crafting ‘ethics’ language that limits or prohibits public officials—including President Donald Trump—and their family members from profiting off crypto ventures. Last week brought reports of a potential compromise that would exempt family members from this limit/ban, which would be great news for the Trump family, whose ridiculously profitable crypto ventures are largely overseen by his sons. But there’s been no public updates on this front.
That is, except for the Office of Government Ethics releasing the president’s latest financial disclosure document on Tuesday, revealing a staggering $1.2 billion in income from crypto sources in 2025. That’s more than he earned from his flagship real estate properties last year, and an exponential increase from his 2024 crypto takings, which occurred before he took the oath of office for the second time.
Trump received $635 million in ‘royalties’ from the sale of so-called ‘Celebration Coins,’ the specifics of which aren’t specified, but Bloomberg reported that these millions flowed from CIC Digital LLC, the company behind the $TRUMP memecoin issued just days before Trump reoccupied the White House in January 2025.
Trump also claimed $515 million from the sale of tokens issued by World Liberty Financial (WLF), the company co-founded by him and his three sons in 2024. Then there’s $65.6 million derived from sales of WLF equity, apparently representing his share of the $500 million sale of a 49% stake in WLF to a fund linked to UAE government officials just days before Trump took his oath.
Apart from his crypto income, Trump also has cold wallets containing over $50 million worth of the BTC token, between $5 million and $25 million of the Ethereum network’s native token ETH, a similar range for the USDC stablecoin issued by Circle (NASDAQ: CRCL), plus between $100,000 and $250,000 in ‘virtual USD’ (whatever that is), and small amounts of other tokens.
And Trump still controls 15.75 billion WLFI, WLF’s governance token, each of which is currently worth a mere $0.057, about 80% below its 2025 peak. But he does have nearly 16 billion of these wooden nickels, so…
Getting back to CLARITY…
Putting aside the inescapable enormity of Trump’s crypto profits, other issues facing CLARITY include ‘illicit finance,’ aka should developers of noncustodial decentralized finance (DeFi) platforms be legally liable when these platforms are used by token-savvy criminals to launder their filthy lucre? Last week saw a group of law enforcement agencies and criminal prosecutors restate their opposition to granting devs this broad immunity, saying it would complicate their efforts to bring crypto crooks to justice.
On June 29, CoinDesk reported that the objecting lawmen had been invited to a sitdown at the White House that day to discuss how their concerns might be assuaged. This would be the second such meeting organized by White House crypto adviser Patrick Witt, who tried and failed to achieve consensus on this issue at a similar confab in June.
There’s no word on whether Monday’s meeting had any more success than the previous one. Early that day, Witt retweeted a post by Senate Banking Committee chair Tim Scott (R-SC) expressing hope that the full Senate will vote on CLARITY in July, but Witt stayed mum on the illicit finance issue.
Scott’s tweet included a screenshot of a Punchbowl News interview with John Thune (R-SD) in which the Senate Majority Leader said he was willing to let negotiations on “legit” CLARITY issues continue, but not indefinitely.
Thune indicated that he’d be willing to bring CLARITY (as written) to the Senate floor for a vote at some point after the Senate reconvenes on July 13, regardless of whether or not enough Dems are willing to support it. CLARITY will require 60 votes to pass, meaning all 53 Republicans and at least seven Dems will need to vote ‘aye.’
Punchbowl’s Brendan Pedersen reported that the talks between the Senate Banking and Agriculture committees on reconciling their respective versions of CLARITY—the Ag committee approved their version in January, although it left its more contentious sections blank—aren’t going great.
All this uncertainty is nudging forecasters into pessimistic territory regarding CLARITY’s fortunes in the current Congress. On June 26, Galaxy Digital’s (NASDAQ: GLXY) head of research, Alex Thorn, reduced CLARITY’s odds of passage to a coin flip, adding that the downgrade (from 60%) is “primarily related to the calendar, not the substance of the bill.”
Thorn noted that the Senate calendar is short and infighting within the GOP and between Congress and the president is delaying passage of other, more important bills. These bills will take precedence over CLARITY if the situation becomes an either/or scenario for allocating Senate floor time.
TD Cowen analyst Jaret Seiberg said this week that he expects CLARITY will be given floor time soon after the Senate reconvenes, with a possible vote that week or the next. But as Thune acknowledged, it’s unclear whether the bill’s language will find favor with the necessary number of Dems, making the bill’s passage “far from assured.”
Once the Senate reconvenes, they’ll have ~20 sitting days before they leave town again on August 8 for their traditional month-long summer break. A report this week by investment bankers Jefferies said failure to pass CLARITY before that August departure date “could push the bill out to next year, or even later, if Democrats flip the Senate in November.”
Stablecoin rewards the crypto vampire that just won’t die
TD Cowen’s Seiberg believes the Senate is unlikely to reopen the CLARITY debate over whether crypto platforms can offer rewards to customers for engaging in certain activities involving stablecoins. That longstanding issue was considered resolved following a bipartisan compromise that eliminated passive rewards for simply holding stablecoins, but the banking sector continues to signal that it plans to go down swinging on this issue.
A couple of weeks ago, the Independent Community Bankers of America (ICBA) released a video highlighting their importance as lenders to local businesses. The video claimed that “crypto insiders are pushing for less accountability and more risk … When crypto gets a free pass, communities pay the price.”
The video echoes the banking sector’s narrative that stablecoin rewards will incentivize bank customers to transfer their savings to crypto platforms, reducing banks’ ability to offer loans to small businesses.
These concerns aren’t entirely theoretical. A community banker in the southern U.S. told the Guardian that $40,000 in customer deposits had fled the coop for ‘crypto investments’ in the past 90 days. Guaranty Bank & Trust president Troy Richards acknowledged that the amount was “relatively small,” but fears that Congress giving stablecoin rewards its official stamp of approval will “accelerate that deposit outflow, even more than now.”
Richards dismissed the crypto sector’s talking point that the fiat reserves backing stablecoins could be held at local banks. “I don’t think any of the issuers of stablecoins are going to be looking to have their reserves at Guaranty Bank in northeast Louisiana. So that’s not going to happen for us.”
At the upper end of this sector, JPMorgan Chase (NASDAQ: JPM) analysts issued a blog post on June 29 titled Getting the framework right for digital assets in the United States. On first glance, the post appears to support CLARITY’s passage by acknowledging that the U.S. “has a genuine opportunity to lead in digital finance.”
The JPM post celebrates tokenization and “programmable money” for having the potential to “modernize financial infrastructure in meaningful ways, particularly as commerce and investments become more global and operate around the clock.”
Many in the crypto sector hailed the apparent conversion of JPM, whose CEO Jamie Dimon recently declared that “the banks will not accept” CLARITY’s stablecoin compromise.
But the post also reiterated many familiar anti-rewards arguments, including the suggestion that crypto operators are looking to engage in “shadow banking—offering yield-like incentives or balance-holding arrangements without the capital, liquidity, consumer protection, and supervision standards that accompany traditional deposit products.”
JPM’s post closes by saying the goal in crafting market structure rules “should not be simply to move fast, but to build a system that Americans can trust—one that allows innovation to thrive without putting consumers, markets, or the broader economy at risk.”
So, different day, same story. And round, round we go.
PAC stacks
On June 30, the Public Citizen nonprofit watchdog group issued a report on how “Crypto, AI, and Online Betting Corporations [are] Behind 2026’s Record Corporate Political Spending.” The report details $294 million that corporate super political action committees (PACs) have spent so far on the 2026 U.S. midterm election, which is pretty impressive considering the actual vote is still over four months away.
That $294 million represents 57% of the $517.5 million in total corporate outlay during the current election cycle, and over one-third ($189 million, 37%) of that total came from “crypto businesses.”
This spending was led by Fairshake, the dominant crypto PAC whose biggest contributors are Coinbase (NASDAQ: COIN) and Ripple Labs. (The Andreessen Horowitz (a16z) (NASDAQ: ZADIHX) venture capital group that was the third leg of this stool appears to have transferred its contributions to the AI effort this cycle).
Crypto firms have collectively contributed $82.6 million to Fairshake’s war chest in the current cycle. Ripple led the crypto contribution chart with $49.6 million, followed by Crypto.com parent company Foris Dax ($38.6 million), which isn’t a Fairshake contributor but has given generously ($35 million) to the Trump-linked MAGA Inc PAC. In fact, Foris Dax is far and away the top contributor to MAGA Inc, which has raised $342 million in the current cycle.
Coinbase ranked third in crypto sector funding with $35.2 million, while Gemini (NASDAQ: GEMI) and the Winklevoss Capital Fund (both run by Cameron and Tyler Winklevoss) have collectively pledged $25.7 million. Wall Street biggies Cantor Fitzgerald (NASDAQ: ZCFITX) followed with $10 million via their funding of the Tether-linked Fellowship PAC.
By comparison, the ‘Big Tech / AI’ category has received a comparatively modest $60 million in corporate contributions in the current cycle, with most of that coming from a16z. It’s worth noting that Josh Vlasto, a top Fairshake exec, is also co-head of the AI-focused Leading the Future PAC, underscoring the significant overlap between AI and crypto among the sectors’ leading funders.
Notably, none of Public Citizen’s tallies include state-level corporate spending, as it’s not required to be reported to the Federal Election Commission (FEC). Nor does the total amount include so-called ‘dark money’ groups.
On June 29, Vermont Sen. Bernie Sanders, an independent who traditionally caucuses with the Dems, tweeted a list of sectors that are leading the 2026 funding splurge. Sanders called this spending “legalized bribery” and demanded an end to the 2010 Citizens United U.S. Supreme Court ruling that cleared the way for this type of corporate largesse. (Given the Court’s Tuesday ruling re campaign finance laws, good luck with that.)
Kalshi runs into geofenced wall in Michigan
The other major sector making it rain this election cycle is ‘online betting,’ with all but $3 million of its $46 million in corporate contributions going to Win for America, the PAC representing daily fantasy sports/sports betting operators DraftKings, FanDuel, Fanatics, and Bet365.
Interestingly, much like the crypto sector’s ads that never mention crypto, Win for America’s ads don’t mention the betting business their funders are in. And like Fairshake, it has partisan-focused offshoots that exclusively support Dems or Republicans.
Sportsbooks are increasingly diversifying their offering into prediction markets, partly as a defensive move due to pure prediction markets like Kalshi and Polymarket making unwanted incursions into states where these sportsbooks hold betting licenses.
The crypto-friendly prediction markets—whose World Cup wagers are giving many Americans their first exposure to digital assets—claim they don’t need state betting licenses because what they offer aren’t bets but ‘swaps’ that are overseen by the federal Commodity Futures Trading Commission (CFTC). This position hasn’t sat well with a growing number of states, leading to legal challenges filed against the prediction markets and countersuits filed by the CFTC.
This week, the Ingham County Circuit Court in Michigan granted the request by the state attorney general’s office and the Michigan Gaming Control Board (MGCB) for a temporary restraining order against Kalshi. Kalshi must deploy geofencing tech to ensure no Michigan customers can access their site, with penalties of $120,000 for every day it defies this order.
Kalshi said it was “implementing restrictions” to comply with the TRO, but a spokesperson repeated the sector’s mantra that prediction markets are “subject to exclusive federal jurisdiction” and “won’t be bullied by interests that care more about protecting their monopolies than their consumers.” The TRO will expire on July 13, while the legal fight rages on.
MGCB exec director Henry Williams issued a statement slamming Kalshi for “targeting Michigan’s most vulnerable residents with sports betting dressed up as investing.” Williams also noted that Kalshi wasn’t honoring state rules requiring bettors to be at least 21 years old and vowed that the MGCB “will continue to use every regulatory and legal tool available” to ensure Kalshi follows the rules.
CFTC slammed for taxpayer-funded legal support for prediction markets
To date, the CFTC has sued nine states (Arizona, Connecticut, Illinois, Kentucky, Minnesota, New Mexico, New York, Rhode Island, and Wisconsin) to defend prediction market operators, but Michigan has yet (as of June 30) to join this illustrious club.
CFTC Chair Michael Selig’s zealous defense of what he claims is federal regulatory turf isn’t sitting well with 17 Democratic senators, who on June 24 sent a joint letter to colleagues Bill Hagerty (R-TN) and Jack Reed (D-RI), respectively, the chair and ranking member of the Senate Appropriations Committee’s Subcommittee on Financial Services and General Government.
The letter seeks to prohibit the CFTC from “using federal funding to prevent states and Tribes from enforcing their gambling laws and gaming compacts with respect to online prediction markets.” The Dems justify their request by noting that prediction markets “are drastically different from the original intent of event contracts, which those companies claim to offer.”
Unlike traditional swaps intended to “hedge against financial risks … it can be hardly argued that wagers, like betting over the Super Bowl, serve the same hedging function as traditional event contracts.” By targeting states with lawsuits, “the CFTC risks becoming an instrument and enabler of online prediction markets’ efforts to bypass states’ consumer protections and oversight, creating a race-to-the-bottom in gambling.”
That letter was followed a day later by another senatorial letter signed by John Curtis (R-UT) and Adam Schiff (D-CA). The bipartisan pair want the CFTC to investigate a Wall Street Journal report that claimed Polymarket paid social media influencers to circulate videos of individuals placing a total of $1.9 million in fake wagers—and winning many of those fake wagers—on sites that appeared to be Polymarket but in reality were in-house test environments for company engineers.
The senators say the allegations in the report “are deeply troubling and demand immediate scrutiny” from the CFTC. The duo “remain concerned that the Commission is neither enforcing the law appropriately, nor is equipped to serve as a federal gambling regulator.”
It’s worth remembering that the normal five-person CFTC is currently a one-man (Selig) show, as Trump has yet to nominate any candidates for the other four seats, despite them having been empty for nearly a year now.
State and tribal gaming operators recently threw a last-minute wrinkle into efforts to pass CLARITY by lobbying Congress to add language that would prohibit prediction market platforms from offering ‘contracts’ on sporting events.
The orange-hued elephant in this room is the fact that Trump has voiced support for prediction market expansion. That may or may not have anything to do with the fact that his son, Don Jr., made a “double-digit millions” investment in Polymarket last year through his 1789 Capital investment group. Don Jr. also serves as an advisor to both Polymarket and Kalshi, and Trump Media & Technology Group (TMTG) (NASDAQ: DJT) has its own prediction market (Trump Predict) in the development pipeline.
Eat and/or tax the rich
Given the Senate’s struggles to pass CLARITY, late-session efforts by Republicans to pass crypto-specific tax legislation appear more performative than substantive (possibly a way to show the crypto PACs that they’re fighting the good fight). But while blockchain-focused advocacy groups are pressing Congress to act, groups less likely to benefit from these bills want Congress to “oppose tax giveaways to crypto billionaires.”
On June 26, a gaggle of consumer and tax advocates, labor unions, and other groups issued a joint letter criticizing the crypto tax bills, including the Tax Clarity for Mining and Staking Act that would allow stakers and block reward miners to defer the tax implications of their token-generating activities until the tokens are sold.
The groups say that “not only would unlimited deferral create preferential tax treatment for crypto assets that don’t and shouldn’t exist for other similar assets, but it is also a tremendously costly provision that would waste billions now and in the future.” The groups claim this would force taxpayers to “subsidize already wealthy crypto holders and firms without any real method of ensuring digital assets are eventually taxed.”
The groups have bones to pick with all the proposed tax plans, but their overarching complaint is that having Congress focus on “new crypto tax giveaways” while taxpayers are struggling to put food on the table is “extremely shortsighted and misguided.”
At the state level, the new 0.2% tax on crypto transactions that Illinois will start imposing next January has already been targeted for (unlikely) destruction. On June 22, Republican State Rep. John Cabello filed House Bill 5798, which would repeal the Digital Asset Privilege Tax Act (DATA) section of the budget bill approved by the state legislature and signed into law by Gov. J.B. Pritzker in June.
The crypto tax is expected to raise $60 million from crypto operators who act as intermediaries for Illinois residents. But The Center Square quoted Cabello saying “there’s a lot of constituents and other folks” that think they’ll be the ones who end up paying. Cabello cited the example of a local Steak and Shake restaurant that accepts crypto payments, wondering if they’d be on the hook for the tax.
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