The crypto industry has spent much of the past two years preparing for regulatory clarity in Washington, but one of its top legislative priorities hit a major roadblock this week. The CLARITY Act, a market-structure bill that would set the rules for digital asset trading in the United States, failed to advance in the Senate on Tuesday, falling short of the 60 votes — a three-fifths supermajority of the 100-member chamber — needed to bring the bill to the floor for debate. The failed vote significantly narrows the legislation's path this year, with the Senate calendar tightening ahead of the Nov. 3 midterm elections.

Strategists say crypto exchanges such as Coinbase may have more at stake than most from the stalled bill. Elsewhere this week, Standard Chartered issued a long-term outlook for Arbitrum, Bitmine moved to turn its Ether treasury into a staking income engine, and the CEO of Phemex argued that artificial intelligence has been a "net negative" for the industry.

Coinbase faces greater CLARITY Act fallout, Saxo strategist says

Ruben Dalfovo, a strategist at Saxo Bank, said Coinbase has more riding on the CLARITY Act than most crypto-linked companies because its trading business is directly exposed to United States market-structure rules.

In a note published Wednesday following the bill's failed procedural vote, Dalfovo said Coinbase is particularly exposed because new rules could determine registration requirements, which assets can be traded, and who is allowed to participate on its platform. Until lawmakers find a way forward, those questions remain unresolved for US-facing platforms.

Other crypto companies could also feel the effects, though Dalfovo said their businesses are less directly tied to market-structure rules. Circle, the issuer of the USDC stablecoin, has exposure tied more closely to USDC adoption and reserve interest, while Strategy relies primarily on its Bitcoin holdings and access to financing.

The market reaction reflected those concerns. Shares of Coinbase, Circle and Strategy fell between 5% and 10% after the vote and continued lower the following day.

Standard Chartered sees Arbitrum hitting $10 as Wall Street moves onchain

Standard Chartered expects Arbitrum, a layer-2 network built to scale Ethereum, to outperform Bitcoin and Ether through 2030, driven by traditional finance firms moving assets onchain and transforming the network's economics.

Geoff Kendrick, the bank's global head of digital assets research, noted that Arbitrum receives 10% of the net protocol revenue generated by companies building on it. Robinhood Chain, launched in July on Arbitrum's technology stack, has materially changed Arbitrum's economics, with September revenue expected at $5 million — more than five times the prior level.

Kendrick projects ARB at $10 by 2030, a roughly 70-fold increase from current prices around $0.14, which have gained 86% over the past month. Standard Chartered's thesis relies on tokenized assets reaching $39 billion, with forecasts of $4 trillion by 2028. Tokenization — representing assets such as stocks and funds as blockchain tokens — underpins that forecast, and Arbitrum's layer-2 infrastructure and revenue-sharing model position it as a beneficiary, though the pace of adoption remains uncertain.

Bitmine eyes $334 million in annual staking revenue from Ether treasury

Bitmine projects $334 million in annual staking revenue from its $15.8 billion crypto treasury, with more than 5 million Ether now staked to generate recurring income even during volatile conditions.

The company added 27,180 ETH last week, bringing its holdings to 5.95 million ETH worth $15.4 billion — roughly 4.9% of Ether's circulating supply. More than 5.06 million ETH is now staked — committed to help secure the Ethereum network in exchange for rewards — generating an estimated $334 million in annualized revenue at current rates. For comparison, the Grayscale Ethereum Staking ETF has staked 84.6% of its Ether, according to its webpage.

Unlike Bitcoin treasury companies, Bitmine can earn recurring income from its crypto holdings through staking, a mechanic Bitcoin's network does not offer. Its stock has gained nearly 38% over the past month but remains down year to date, according to Yahoo Finance. Strategy, meanwhile, went a second straight week without buying Bitcoin, instead spending $139.3 million to repurchase preferred stock.

AI is draining crypto liquidity and empowering attackers, Phemex CEO says

Federico Variola, CEO of Phemex, said AI has been a "net negative" for crypto, diverting liquidity from the industry while empowering attackers who exploit protocols.

Speaking on Cointelegraph's Chain Reaction, Variola said AI has "empowered a lot of bad actors" and driven up cybersecurity costs for smaller teams. In July, attackers drained roughly $116 million in Bitcoin from more than 5,200 addresses tied to a Coldcard hardware wallet flaw widely believed to have been discovered through malicious AI use. Coinkite CEO Rodolfo Novak warned that AI-assisted code review now outpaces seasoned experts.

Variola cautioned that AI-driven threats could make self-custody and DeFi less appealing to retail users, pushing the industry toward greater centralization. He sees practical benefits in AI agents for portfolio building and trading decisions, but said they will not fully replace human judgment. CertiK's Natalie Newson, however, noted that AI can also be "one of the biggest defenses."

Crypto Biz is a weekly digest covering the business behind blockchain and crypto, published every Thursday.

Source: Cointelegraph