The United States Senate failed to advance the Digital Asset Market Clarity (CLARITY) Act this week, but US regulators quickly moved to fill the legislative gap, with the Securities and Exchange Commission unveiling an exemption for tokenized stocks and the Commodity Futures Trading Commission proposing relief for crypto trading software. A House committee also advanced a bill to formalize the Strategic Bitcoin Reserve, while a ransom drama unfolded around stolen Revolut customer data.

CLARITY Act cloture vote fails

After a year's buildup, the US Senate failed to pass a cloture motion on the Digital Asset Market Clarity (CLARITY) Act. The motion received 49 votes in favor and 50 against, well short of the 60 votes required to proceed. Cloture is the Senate procedure for ending debate and moving a bill toward a final vote, so without it the market structure legislation remains stalled.

Republican Senator Thom Tillis's "no" vote was not all it seemed. He confirmed that he had only switched sides at the last minute, a maneuver intended to let him call a new vote in the future.

The outcome does not necessarily spell the end for the legislation. The GENIUS bill suffered a similar failed cloture vote and went on to pass just 11 days later. While a small chance remains that the CLARITY Act could still pass, the political dynamics and the limited number of legislative days available suggest passage is unlikely.

Congressman Shri Thanedar, a Democrat who supported CLARITY in the House, told Cointelegraph Magazine that the timeline was 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," he said.

Seven Democratic senators who voted against the bill said they "remain committed" to passing it, while Democrats continue to demand changes. "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 Senator Angela Alsobrooks.

Abhishek Vaidyanathan, chief legal officer at NEAR, noted that the House had already canceled two sitting weeks and that the Senate's state work period began October 5.

"Now that cloture failed, the next Congress is the likely next opportunity to address crypto market structure," he said.

SEC proposes new rules in CLARITY's absence

After the failed vote, Ripple CEO Brad Garlinghouse predicted that US regulators would "continue to work hard issue rules to fill the legislative gap."

The industry did not have long to wait. Two days later, the US Securities and Exchange Commission announced a five-year exemption allowing limited trading of tokenized US stocks on decentralized public blockchains.

Under the Innovation Exemption, tokenized stocks — blockchain representations of traditional equities — can be traded using automated market makers, and the protocols facilitating that trading are exempt from having to register as securities exchanges. In practice, that removes a key legal barrier for decentralized venues hosting tokenized equities.

The new rules, however, do not exempt "synthetic" stock tokens that do not give holders the same rights as traditional stocks — an outcome that affects virtually all of the stock tokens issued by xStocks and Robinhood to date.

CFTC moves to propose new crypto rules

The Commodity Futures Trading Commission, which oversees the US derivatives markets, also announced regulatory relief for "passive software" providers that connect users to regulated derivatives firms and exchanges.

The agency issued a no-action position stating it would not recommend enforcement against qualifying providers for failing to register as brokers when facilitating trading with CFTC-registered firms and exchanges. The position could make it easier for crypto wallets and other applications to offer access to regulated derivatives, including perpetual contracts and prediction markets.

The CFTC has also submitted draft crypto rules to the White House titled "Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets." The action is listed at the "prerule" stage, meaning it has not yet been formally proposed.

Separately, Coinbase filed an application with the CFTC this week to offer 24/5 perpetual futures trading on individual US stocks. Kalshi filed a very similar proposal on the day. Both applications now place the question of stock perpetuals squarely before the derivatives regulator.

House committee advances Bitcoin reserve bill

The American Reserve Modernization Act of 2026 passed the US House Committee on Financial Services this week. The bill would formalize in law the current executive order establishing a Strategic Bitcoin Reserve, shifting the reserve from executive action to a statutory footing, and a Digital Asset Stockpile containing other forfeited cryptocurrencies would also be held within the Department of the Treasury.

The legislation requires all federal agencies to provide a full audit of the digital assets they hold and orders them to provide quarterly "proof of reserve" reports. It would also direct a study of budget-neutral acquisition strategies for buying additional Bitcoin for the reserve. Committee passage is an early step in the legislative process, and the bill would still need approval from the full House and Senate before it could become law.

Bitcoin Policy Institute executive director Connor Brown on Wednesday called the bill "a genuinely historic step for Bitcoin policy."

The US House Ways and Means Committee also passed the Digital Asset Tax Certainty Act with bipartisan support, advancing legislation aimed at reshaping the federal tax treatment of digital assets.

Second $3 million ransom demand in Revolut data theft

The theft of sensitive Revolut customer data, including passports and KYC selfies, took a turn for the bizarre when a second hacker demanded a $3 million ransom.

Calling themselves "IAmNotAVillain," the actor publicly demanded 6,000 Monero — a privacy-focused cryptocurrency designed to obscure transaction details — from Revolut within 24 hours or said the customer records would be sold to criminal groups. Earlier, a group calling itself "Revolut Smilik" had demanded 10,000 Bitcoin, worth about $780 million, for the data. IAmNotAVillain suggested the earlier demand came from a former associate who held only a small sample of the data.

The theft underscored the risks of KYC mandates that lead thousands of companies to store identity documents across the web, creating honeypots for hackers. Zero-knowledge proofs now make it possible to verify identity without sending any identity documents to third parties at all, but the technology is not yet in wide use.

Weekly market performance

At the end of the week, Bitcoin (BTC) was up 5.9% to trade at $81,185, Ethereum (ETH) was up 6.6% to trade at $2,639, and XRP (XRP) was up 5.4% to $1.40, with total crypto market capitalization at $2.78 trillion, according to CoinMarketCap.

Among the 100 largest cryptocurrencies, the top three weekly gainers were NEAR Protocol (NEAR), up 76.4%; Arbitrum (ARB), up 64.3%; and Ethena (ENA), up 61.6%. The top three weekly losers were Stable (STABLE), down 11.6%; Pi (PI), down 11.3%; and SPX6900 (SPX), down 1.8%.

Prediction of the week: Standard Chartered sees Arbitrum up 70x by 2030

Standard Chartered said the price of layer-2 network Arbitrum could reach as high as $10 by 2030. From current levels, that would represent a roughly 70-fold increase, far exceeding the bank's projected returns for Bitcoin (BTC) and Ether (ETH) over the same period.

Geoff Kendrick, Standard Chartered's global head of digital assets research, said Arbitrum's economics offer considerable upside because the network receives 10% of the net protocol revenue generated by companies building on it. Fees from Robinhood Chain, an Ethereum layer-2 built on Arbitrum technology, are set to push Arbitrum's September revenue to $5 million, a fivefold increase from before the new layer-2 launched in July.

Kendrick said the biggest risks to his ARB price projection include "a slower-than-expected pace of asset tokenization and more competition from alternate blockchains."

Chainalysis: state hackers drive 420% surge in onchain malware

The number of times attackers stored malware instructions or infrastructure information on public blockchains rose 420% over the past 12 months, with state-linked hackers accounting for roughly two-thirds of new activity each quarter, according to a Chainalysis report.

Chainalysis identified North Korea- and Iran-linked operators among the state actors adopting the technique. The analytics firm also connected previously unattributed activity spanning Tron, Aptos and BNB Smart Chain (BSC) to UNC5342, a North Korea-linked group tracked by Google Threat Intelligence.

According to Chainalysis, using public blockchains increases the durability of malware campaigns because the stored information remains accessible even after domains, servers or code repositories are taken down.

BIS paper finds sixfold gap in Bitcoin transfer estimates

Researchers at the Bank for International Settlements, the Basel-based institution that serves as a hub for cooperation among the world's central banks, found that estimates of Bitcoin onchain transfer values can vary by as much as sixfold depending on how transactions are measured.

The six gap reflects differences between measurement methods, including how change outputs and other transfers back to the sender are treated. The measurement problem also extends to Bitcoin's market capitalization: the researchers found the conventional measure has at times been as much as four times higher than realized capitalization, which values each coin at the price when it last moved. For analysts and policymakers, the findings underline how much headline figures on Bitcoin's onchain economy depend on the methodology behind them.

Hong Kong jails ex-banker over $1.6 billion fraud and crypto bribes

A former bank official in Hong Kong who falsely authenticated letters of credit — bank-issued guarantees widely used in trade finance — worth more than $1.6 billion was sentenced to four years in prison and ordered to make restitution of more than $470,000 received in cryptocurrency bribes.

Lam Chun-yin, 32, a former customer relationship manager at China Construction Bank (Asia), had previously pleaded guilty in District Court, The Standard reported on Saturday.

Source: Cointelegraph — Who Needs CLARITY Anyway? ARB Could See 70X Increase: Hodler's Digest