CLARITY Act stumbles while ARB eyes 70-fold surge: Hodler's Digest
Legislative clarity eluded cryptocurrency markets, though tokenized equity trading gained legal status and Bitcoin Reserve legislation progressed. Standard Chartered forecasts Arbitrum could surge 70-fold through 2030.
CLARITY legislation encounters Senate roadblock, yet hope persists
Following twelve months of anticipation, the United States Senate rejected a cloture motion for the Digital Asset Market Clarity (CLARITY) Act.
The procedural vote garnered a mere 49 affirmative votes against 50 negative ones, significantly below the required threshold of 60 votes.
Nevertheless, Republican Senator Thom Tillis's negative vote carried strategic implications, as he later revealed his last-minute position change was tactical, preserving his ability to request another vote down the line.
Could this indicate the CLARITY Act might return from the dead? The GENIUS bill experienced a comparable cloture failure before successfully passing merely 11 days afterward.
Though a slim possibility exists for CLARITY's eventual passage, the political landscape combined with limited remaining legislative days suggests an improbable outcome.
Representative Shri Thanedar, a Democratic CLARITY supporter in the House of Representatives, informed Magazine that scheduling constraints represented a "major barrier."
"There are only 20 legislative days left in this Congress, all of them after the midterms, making odds of a 2026 compromise, unfortunately, very low."
Seven Democratic senators who cast votes opposing the legislation stated they "remain committed" to its eventual passage. At some future juncture. "We were ready to strike a deal today and in discussions right up until the vote. Republican leadership shut it down at the very last minute," said Sen. Angela Alsobrooks.
NEAR chief legal officer Abhishek Vaidyanathan observed the House had previously canceled two scheduled sitting weeks and noted the Senate's state work period commenced October 5.
"Now that cloture failed, the next Congress is the likely next opportunity to address crypto market structure," he said.
Securities and Exchange Commission Chair introduces fresh regulations following CLARITY defeat
Following the unsuccessful vote, Ripple CEO Brad Garlinghouse forecasted that United States regulatory bodies will "continue to work hard to issue rules to fill the legislative gap."
The cryptocurrency sector received swift confirmation when the US Securities and Exchange Commission unveiled just two days afterward a five-year exemption permitting limited tokenized US stock trading on decentralized public blockchain networks.
The Innovation Exemption permits tokenized equity trading through automated market makers and grants exemptions from securities exchange registration requirements.
The new regulatory framework does not, however, provide exemptions for "synthetic" stock tokens failing to grant holders equivalent rights as conventional stocks. This development poses challenges for virtually all stock tokens previously issued through xStocks and Robinhood platforms.
Commodity Futures Trading Commission introduces additional cryptocurrency regulations
The Commodity Futures Trading Commission simultaneously revealed regulatory accommodations for "passive software" providers facilitating connections between users and regulated derivatives companies and trading platforms.
The agency issued a no-action statement indicating it would refrain from recommending enforcement actions against qualifying providers or their staff for registration failures as introducing brokers or associated persons when enabling trading with CFTC-registered entities and exchanges.
This position potentially simplifies the process for cryptocurrency wallets and related applications to provide access to regulated derivatives products, including perpetual contracts and prediction markets.
The CFTC has additionally submitted preliminary cryptocurrency regulations to the White House titled the "Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets." The submission currently appears at the "prerule" stage, indicating formal proposal procedures have not yet commenced.
Coinbase filed an application this week with the CFTC seeking authorization to provide 24/5 perpetual futures trading for individual US equities. Kalshi submitted a substantially similar application on the identical day.
Congressional committee approves Bitcoin Reserve legislation
The American Reserve Modernization Act of 2026 successfully passed through the US House Committee on Financial Services this week. The legislation would codify the existing executive order creating a Strategic Bitcoin Reserve into statutory law. A Digital Asset Stockpile housing other confiscated cryptocurrencies would similarly be maintained within the Department of the Treasury.
The proposed law mandates all federal agencies conduct comprehensive audits of their digital asset holdings and requires quarterly "proof of reserve" reporting.
The legislation would additionally commission a study examining budget-neutral acquisition approaches for purchasing supplementary Bitcoin for the reserve. Bitcoin Policy Institute executive director Connor Brown described it Wednesday as a "genuinely historic step for Bitcoin policy."
The US House Ways and Means Committee similarly approved the Digital Asset Tax Certainty Act with bipartisan backing, moving forward legislation designed to transform federal taxation treatment of digital assets.
Revolut faces $3 million extortion demand, exposing identity document storage vulnerabilities
The compromise of sensitive customer information including passport documentation and KYC selfie photographs from Revolut entered unusual territory when a second cybercriminal issued a $3 million ransom demand.
Operating under the alias "IAmNotAVillain" the threat actor publicly demanded 6,000 Monero from Revolut within a 24-hour timeframe or threatened selling the customer records to criminal organizations.
Previously a collective identifying as "Revolut Smilik" had requested 10,000 Bitcoin, valued at approximately $780 million, for the compromised data. IAmNotAVillain suggested the demand originated from a former partner who possessed only a limited sample of the information.
The data breach underscored the hazards of mandatory KYC verification requirements resulting in numerous companies maintaining ID documentation across the internet, creating attractive targets for cybercriminals.
Significantly, technology now exists to authenticate identity through zero knowledge proofs without transmitting any identification documents to external parties whatsoever, though the technology has not achieved widespread adoption.
Market Winners and Losers
At the end of the week, Bitcoin (BTC) is up 5.9% to trade at $81,185, Ethereum (ETH) is up 6.6% to trade at $2,639 and XRP (XRP) is up 5.4% to $1.40. The total market cap is at $2.78 trillion according to CoinMarketCap.
Among the biggest 100 cryptocurrencies, the top three altcoin winners of the week are NEAR Protocol (NEAR) with a 76.4% gain, Arbitrum (ARB) on 64.3%, and Ethena (ENA) on 61.6%.
The top three altcoin losers of the week are Stable (STABLE) which was down 11.6%, Pi (PI) down 11.3% and SPX6900 (SPX) down 1.8%.
Featured Prediction of the Week
Standard Chartered projects Arbitrum could achieve 70-fold increase through 2030
Standard Chartered forecasts that layer-2 network Arbitrum's token price could climb as high as $10 by 2030. Measured from present valuations, this would constitute an approximately 70-fold appreciation, substantially surpassing Standard Chartered's anticipated returns for Bitcoin (BTC) and Ether (ETH) throughout the identical timeframe.
Geoff Kendrick, Standard Chartered's global head of digital assets research, explained Arbitrum's economic model presents substantial appreciation potential because the network captures 10% of the net protocol revenue produced by companies developing on its infrastructure with Robinhood Chain serving as the initial major illustration. Robinhood fees will elevate Arbitrum's September revenue to $5 million, representing a fivefold expansion from pre-Robinhood Chain levels in July.
Kendrick identified the primary threats to his ARB price forecast including "a slower-than-expected pace of asset tokenization and more competition from alternate blockchains."
Leading FUD Of The Week
Nation-state threat actors fuel 420% increase in blockchain-based malware, Chainalysis discovers
State-sponsored hackers represented approximately two-thirds of new activity quarterly as the frequency of attackers storing malware instructions or infrastructure data on public blockchains surged 420% throughout the past 12 months, according to a Chainalysis report.
Chainalysis identified North Korea and Iran-linked operators among the state actors implementing the technique. The analytics company additionally connected previously unattributed activity across Tron, Aptos and BNB Smart Chain (BSC) to UNC5342, a North Korea-linked collective tracked by Google Threat Intelligence.
Chainalysis stated that utilizing public blockchains enhances the resilience of malware campaigns because the deposited information remains retrievable after domains, servers or code repositories are eliminated.
Bank for International Settlements research reveals substantial discrepancy in Bitcoin onchain transfer calculations
Researchers at the Bank for International Settlements discovered that Bitcoin onchain transfer value estimates can fluctuate by as much as sixfold depending on transaction measurement methodology.
The sixfold disparity represents differences among measurement approaches, including treatment of change outputs and other transfers returned to the sender.
The measurement challenge additionally applies to Bitcoin's market capitalization. The researchers determined that the traditional measure has occasionally been as much as four times elevated compared to realized capitalization, which values each coin at the price when it last moved.
Hong Kong imprisons former banker over $1.6B fraudulent credit, cryptocurrency kickbacks
A former banking official in Hong Kong who fraudulently authenticated letters of credit exceeding $1.6 billion received a four-year prison sentence and was ordered to provide restitution exceeding $470,000 he obtained in cryptocurrency bribes.
Lam Chun-yin, 32, who served as a customer relationship manager at China Construction Bank (Asia), had previously entered a guilty plea in District Court, The Standard reported on Saturday.
Featured Magazine Articles of the Week
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Revolut ID thefts highlight KYC's dangers: Here's how to fix it
Zero-knowledge technology could let companies verify who you are without storing your identity documents. So why isn't it already standard practice?