07-24-2026 
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U.S. senators appear resigned to missing their August deadline for voting on crypto market structure legislation, unless President Donald Trump is willing to accept tougher limits on his crypto activities.
- CLARITY: it ain’t looking good
- Banking sector split over CLARITY
- Just how big is crypto economic impact?
- Crypto campaign cash floods into Michigan House primary
- Digital Chamber sues Illinois over crypto transaction tax
- Tether, Howard Lutnick and their GENIUS moves
Thursday saw prices of prominent tokens shed a few percentage points, reflecting the general lack of enthusiasm that greeted Wednesday’s release of a new draft of the Senate’s digital asset market structure legislation (the CLARITY Act). The Republican-authored changes to the ‘ethics’ issue, along with the absence of changes regarding stablecoin ‘rewards,’ have failed to convince skeptical senators to get behind this push.
Politico reported Thursday that a bipartisan group of senators continues to try to negotiate mutually acceptable compromises, but Dems are still sour over the weak ‘ethics’ language that would do little to rein in President Trump’s crypto profiteering. Sen. Ruben Gallego (D-AZ) didn’t mince words, saying “whatever piece of shit [Republicans] sent back to us, that was not a serious effort.”
Sen. Thom Tillis (R-NC) said Republicans would “have to have one final discussion with the White House to see if a couple of other things that look reasonable to me are acceptable to the president.” But Trump has bristled at previous ethics proposals that would have more tightly crimped his crypto style, so it’s unclear why he’d be any more amenable to compromise now.
Thursday morning saw Sen. Cynthia Lummis (R-WY) speak to Fox Business host Maria Bartiromo, addressing the ethics issue by complaining that “there’s no pleasing Democrats at this point. So we’re facing some headwinds.”
Referring to the new CLARITY text that would prevent state attorneys-general from bringing charges against public officials who violate the ethics provisions, Lummis called it “kind of a bright line.” Lummis repeated comments she made on Wednesday that even some Democrat senators had told her “we don’t want that.”
Lummis claimed the ethics rules were crafted not with the idea of pinning it to “one person who holds one office for the next two years, but rather over time that will serve the House, the Senate, the judiciary and the executive branch in a fair way.” Lummis claimed, “The struggle is, of course, a lot of Democrats are absolutely focused on one person, and that’s President Trump.”
Lummis said her GOP colleague Tillis is “working with Democrats to continue to try to find a way that they could support the ethics provisions, but it’s hard for me to see it right now because they’re so focused on getting a pound of flesh from President Trump.”
As for timelines for further negotiations and a possible floor vote on a ‘finished’ bill, Lummis noted that the funeral for the recently deceased Sen. Lindsey Graham (R-SC) is next Wednesday, July 29, “so we’ll have some absenteeism.” But Lummis claimed, “that gives us a few more days to try to continue to work on this.”
Friday, August 7, is the last possible day that the Senate can hold a floor vote on CLARITY before the chamber begins its traditional summer break. The fear is that if there’s no vote by that date, CLARITY isn’t likely to get a vote before November’s midterm elections, leaving only the post-election lame duck session in which to get ‘er done.
Lummis said getting a vote before the August break is “still my goal,” in part because “I personally am losing the ability to muster the enthusiasm after 11 months of negotiating to try to find an answer that pleases everyone.”
Speaking to reporters Thursday, Senate Majority Leader John Thune (R-SD) appeared resigned to CLARITY missing that August deadline. Thune suggested the Senate might at least start the procedural voting that precedes a final floor vote, with the idea of making a final mad sprint when the Senate reconvenes on Monday, September 14.
That would leave three weeks before the Senate breaks again for the midterms on Friday, October 2. But as Sen. John Kennedy (R-LA) told Punchbowl’s Brendan Pedersen on Wednesday, if there’s no vote by August, “I think the odds shift against us.”
Big banks v little banks
During her Fox Business hit, Lummis noted that “the banks are putting on a full court press that’s scaring some senators.” Many banks, particularly smaller community banks, fear mass deposit flight by account holders looking to take advantage of the ‘rewards’ available by using stablecoins on crypto platforms, which offer higher rates of return than interest on bank savings accounts.
These banks want CLARITY to include language that puts limits on what kind of ‘rewards’ the crypto platforms can offer their customers. But while some senators are taking the banks’ concerns seriously, others appear only too eager to let the matter slide.
On Thursday, Punchbowl’s Pedersen said “it’s not clear [CLARITY] has 50 votes in the Senate,” let alone the 60 ‘aye’ votes that will be required on the Senate floor. Pedersen said two GOP senators (Utah’s John Curtis and John Cornyn of Texas) “share banks’ concerns about deposit flight.”
But CLARITY got a thumbs-up as written by David Solomon, CEO of Goldman Sachs (NASDAQ: GS). Solomon told Politico he was “very supportive” of the bill advancing “so we can get some market structure in place and start to move the innovation process along.”
Solomon acknowledged that CLARITY “is not perfect,” but said it provides “a level playing field to enhance market stability and allow these markets to develop appropriately.” CLARITY will allow institutions “that have been on the sidelines to participate more actively. At this point, I think that’s the most important thing.”
Unlike the smaller retail-focused banks that are more reliant on customer deposits, Solomon said, “We believe strongly that we need one system where everybody can participate. As we move forward, there’ll be other things that need to happen. But this is a step in the right direction.”
The day before CLARITY’s latest draft dropped, the United States Hispanic Chamber of Commerce (USHCC) sent Senate leaders a letter warning that CLARITY could spur “the migration of deposits from federally insured financial institutions into digital asset platforms and related entities that perform no comparable lending function … The impact of reduced community bank lending would fall disproportionately on Hispanic entrepreneurs.”
The USHCC wants the Senate to revise CLARITY to reduce the risk of deposit migration, protect community banks’ ability to serve minority-owned businesses, and “require digital asset firms benefiting from increased financial activity [to] contribute to community development and financial inclusion efforts.”
The USHCC’s pleas inject an interesting dynamic into this debate, given that Hispanic voters swung hard to the GOP in the 2024 election but have since shown signs of buyers’ remorse. With the midterms looming, Dems would be wise to offer this potentially pivotal demographic what ABC News recently called “something to vote for, not just something to vote against.”
Everyone works in crypto
The level of time/effort that Congress is willing to devote to CLARITY might suggest that digital assets are a key sector of the U.S. economy. A new Crypto at Work report by the National Cryptocurrency Association (NCA) attempts to bolster this view. However, previous reports by the Ripple Labs-funded NCA have included elevated figures that don’t bear much resemblance to government-funded research.
With that caveat in mind, the NCA takes a three-pronged approach to quantifying crypto’s economic impact. First is the ‘direct’ impact from the wages paid to individuals employed by crypto firms and the economic output of these firms. Second is the ‘indirect’ impact of the crypto supply chain, while the third plank involves the ‘induced’ impact of crypto workers spending their salaries on goods and services from non-crypto companies.
The NCA claims the crypto sector directly employs ~36,000 individuals, with the top occupations involving software and data engineering (10,100), compliance/finance/business operations (5,450), executives/managers (5,100), and business operations/administrative support (4,760).
The NCA cites Bureau of Labor Statistics data to claim that direct crypto payrolls exceed those of sectors such as coffee & tea manufacturing (28,400), cement manufacturing (15,300), and tobacco manufacturing (10,600).
The report claims that crypto workers indirectly support another 75,000 employees at supplier companies (e.g., “cloud infrastructure, legal counsel, office space, or insurance”), plus another 123,000 ‘induced’ jobs supported by crypto employee spending.
The total job figure comes to 232,000 individuals who, combined, will make a ‘total economic contribution’ of $55 billion this year, of which only $13 billion is the direct contribution from crypto staff.Fairshake wades into Michigan Dem primary fight
Crypto’s alleged economic footprint notwithstanding, the primary motivating factor behind Congress pushing crypto legislation is the massive financial support the industry can throw behind your election campaigns, or, more ominously, behind your opponent’s.
The Fairshake political action committee (PAC) showed it meant business in the 2024 election cycle, spending over $130 million to elect pro-crypto candidates and defeat crypto opponents. The highly visible success of that effort not only convinced Fairshake to go even bigger in the current election cycle, but it spawned a flurry of crypto PAC copycats (as well as similar efforts aimed at furthering AI and other tech-focused interests).
While crypto PACs have spent ~$73 million in the current cycle and have another $255 million allocated but waiting to be deployed, spending has slowed since the flurry of big-money primary contests in June.
But recent Federal Election Commission (FEC) filings show Fairshake’s Dem-focused offshoot Protect Progress has spent nearly $1 million running ads supporting Shri Thanedar—the incumbent in Michigan’s 13th District and a vocal supporter of crypto legislation—and opposing Thanedar’s primary opponent, state Rep. Donavan McKinney.
After the crypto funding was revealed, McKinney issued a statement saying the “the crypto lobby” was funding attack ads against him “to pay Shri back for the votes he took allowing Trump to make over $1 billion off crypto.”
Thanedar could use a little of Trump’s crypto profiteering magic. During the 2024 election cycle, Thanedar invested $3.7 million of his campaign’s cash (most of which he’d personally loaned to his campaign) in the Grayscale Bitcoin ETF (exchange-traded fund). The ensuing rise in the token’s price as the momentum of Trump’s pro-crypto campaign grew resulted in a tidy windfall for Thanedar’s campaign.
But what goes up usually comes down, and the plunge that the BTC token suffered following its all-time price peak last October put a serious dent in Thanedar’s crypto portfolio. His campaign’s latest FEC filing shows investment losses to date of $3.9 million (page 150), with $630,000 of that coming in the most recent quarter.
As a director at the OpenSecrets campaign finance watchdog group told The Intercept last week, it’s not uncommon for candidates to suffer losses after putting campaign cash to work in the market. “But you’re usually going to find that they’re going to put it in something a little less volatile than the crypto market.”
One other fun PAC note: FEC filings show that on June 19, Cameron and Tyler Winklevoss, the brothers behind the Gemini (NASDAQ: GEMI) digital asset exchange turned prediction market, each donated $5 million worth of BTC to the Trump-linked MAGA Inc PAC.
That $10 million contribution came three weeks after the new Trump-aligned leadership of the Commodity Futures Trading Commission (CFTC) filed a joint motion with Gemini seeking to end “continuing enforcement of the consent order” resulting from Gemini’s $5 million settlement with the CFTC in January 2025 for “making false or misleading statements of material facts” in CFTC filings. Pure coincidence, we’re sure.
Illinois tax faces legal challenge
Illinois seriously irked crypto bros last month when Gov. J.B. Pritzker put his signature on the state’s latest budget, which includes a 0.2% tax on digital asset transactions. The tax is to be paid by ‘digital asset brokers,’ aka crypto platforms that facilitate transactions with Illinois-based customers. The state believes the tax will bring in $60 million per year once it takes effect in January 2027.
This Digital Asset Tax Act (DATA) has already been the subject of legislation aimed at repealing the measure. But on July 21, a civil complaint was filed in an Illinois circuit court by the blockchain advocacy group The Digital Chamber (TDC), seeking preliminary and permanent injunctive relief barring the state from implementing the tax.
The 32-page complaint claims DATA “imposes materially different tax consequences on economically identical property solely because ownership is recorded and transferred using blockchain technology.” The suit asks whether a state may “tax property and commerce based not on their economic substance, but on the technological infrastructure through which they are recorded, held, and transferred.”
In an X thread announcing the suit, TDC accused the Illinois state legislature of slipping DATA into the budget “the night before the final vote, with no hearing and no debate.” TDC claimed its members “are already incurring costs trying to comply with the new tax” ahead of its implementation.
TDC warned that if Illinois is allowed to tax crypto transactions, other states might follow suit, or possibly expand the scope of taxable transactions to include “AI and cloud-based applications.” TDC CEO Cody Carbone tweeted a request for “all other digital asset and traditional finance trade groups to join our suit in unity against this burdensome and unfair tax.”
Tether loves sausage
With CLARITY negotiations going down to the wire, it’s instructive to consider just how the legislative sausage gets made. But as the adage goes, if you like sausage, you’re generally better off not knowing what goes into it.
On July 22, Bloomberg did a deep dive on ‘How Tether Benefited as Trump Insiders Shaped First US Crypto Law.’ The article looks at the behind-the-scenes machinations as the world’s largest stablecoin issuer looked to put its thumb on the scale as the stablecoin-focused GENIUS Act was being drafted.
The article recounts the influence wielded by Secretary of Commerce Howard Lutnick, founder of Wall Street fixture Cantor Fitzgerald (NASDAQ: ZCFITX), and Bo Hines, a twice-failed GOP candidate who became a key White House crypto advisor before leaving government to head up Tether’s U.S.-facing offshoot one month after Trump signed GENIUS into law in July 2025.
Most of Bloomberg’s revelations won’t be news to longtime crypto observers, but it’s interesting to learn how hard Hines pushed D.C. lawmakers to double the grace period in which Tether would need to comply with GENIUS from 18 months to three years. Bloomberg’s sources claim Hines advised those negotiating GENIUS’s terms that maintaining the three-year period was a “red line” for Tether.
About a year before Trump’s 2024 election, Lutnick publicly declared that Tether did indeed have the fiat reserve assets backing its billions in issued USDT, despite Tether’s decade-long aversion (only recently forsworn) to allowing a truly independent audit of said reserves.
Not long after that declaration, Cantor was granted the right to a 5% stake in Tether, reportedly worth around $6 billion at the time, despite Cantor providing a convertible bond to Tether worth only a tenth of that sum (Tether founder Giancarlo Devasini reportedly claimed Cantor got a “bloody cheap” price).
Lutnick/Cantor began lobbying D.C. politicians involved in crafting crypto legislation, with court filings alleging that Lutnick set out to “kill every bill about stablecoins, crypto, etc.” Some of these pols later reversed their stances on keeping Tether out of the U.S. market entirely, in part by agreeing to the GENIUS clause, which allows stablecoin firms to operate in the U.S. provided the jurisdictions in which they are based have enacted ‘reciprocal’ regulation similar to U.S. rules.
Following Trump’s election victory, Tether made a $775 million investment in the money-losing conservative video platform Rumble (NASDAQ: RUM). Rumble’s investors included Trump’s Vice-President J.D. Vance and David Sacks, who joined the administration as America’s first AI & Crypto Czar. More than two-thirds ($525 million) of Tether’s Rumble investment ultimately went to share buybacks benefiting “certain members of key management” rather than building out a profitable business.
Hines was brought in as Sacks’ crypto deputy and quickly began pushing back on Democrats’ efforts to impose the 18-month exit timeline for noncompliant stablecoin issuers. Hines repeatedly emphasized that lawmakers should do as Trump wished and dismissed concerns over USDT’s role in facilitating crime and sanctions evasion.
Hines now reps USAT, the stablecoin that Tether insists will be GENIUS-compliant. Compliance would include maintaining fiat reserves in cash and U.S. Treasury bills rather than the grab-bag of volatile assets currently backing USDT (tens of billions of dollars’ worth of gold bricks, BTC tokens, and ‘secured loans,’ including loans made to Lutnick’s family).
So far, neither Tether nor Lutnick nor Hines has publicly commented on the Bloomberg report.
Watch: What Happens When Blockchain Becomes Invisible?
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