The CLARITY Act Fell Eleven Votes Short of Cloture

In Today's Note

• The Senate's cloture vote on the CLARITY Act failed 49-50, eleven short of the 60 needed, with five Democrats voting no. BTC fell below $76K for the first time in almost a month, and BTC ETFs shed $450.4M, their largest daily outflow since late June.
• The House Ways and Means Committee released a 114-page crypto tax bill, up for markup today. It would create a $10 de minimis exemption for certain transactions and network fees, and extend wash-sale rules to digital assets repurchased within 30 days.

Market Snapshot: Overnight Moves

Macro & Markets

• The U.S. Senate failed to invoke cloture on the CLARITY Act, with the vote ending 49-50, short of the 60 votes required to end debate on the crypto market-structure bill.
• Democratic Sens. Kirsten Gillibrand, Catherine Cortez Masto, Angela Alsobrooks, Cory Booker and Mark Warner voted against cloture, with Warner saying unresolved ethics concerns involving President Donald Trump’s crypto interests prevented him from supporting it.
• The bill would establish a federal framework dividing digital-asset oversight between the SEC and CFTC, but its path forward is unresolved following the failed vote, while both agencies are separately pursuing crypto rulemaking.
• Sen. Elizabeth Warren said she supports passing federal crypto legislation but does not support the current CLARITY Act, arguing that any final bill should include stronger rules on public officials’ crypto holdings, consumer and national-security protections, and measures targeting illicit finance and terrorism.
• Warren said she would help negotiate a different crypto bill if Democrats take control of the Senate Banking Committee after the November elections.

• Crypto asset prices declined across the board, with BTC falling below $76K for the first time in almost a month and down 4% over the last 24 hours.
• ETH also fell from the $2,500 level it had consolidated around over the past two weeks and currently trades below $2,400.
• Both assets saw significant outflows from their spot ETF products, BTC ETFs sold $450.4M worth of the asset, marking the largest single-day outflow since late June 2026, while Ethereum spot exchange-traded funds saw outflows of $142.3M.
• Crypto exchange Coinbase Global closed 10.1% lower on the day, while stablecoin issuer Circle Internet Group declined more than 11%.

• On Wall Street, ahead of the Fed’s interest rate decision today, where it is expected to raise rates for the first time since 2023, risk-on assets sold off for another day amidst elevated oil prices and higher government bond yields.
• Nearly 350 of the 500 firms in the S&P 500 finished lower, dragging the index down 0.45%. The tech-heavy Nasdaq-100 closed the session down 0.65%, while a gauge of chipmakers recovered slightly from losses on Monday and rose 0.4%.
• The benchmark 10-year US yield rose above 5%, the highest level in nearly two decades, while longer-dated Treasuries across the curve continued to sell off.

• US Treasury Secretary Scott Bessent said yesterday that the US only deployed a “nominal” amount during its coordinated intervention with Japan’s Ministry of Finance in late July to prop up the Japanese yen, further arguing the operation was in American interests.
• “A stronger yen is better for American exports, a stronger yen means that the Japanese government will not have to sell US assets to finance foreign currency intervention”, Bessent said in testimony at the House Financial Services Committee.

DeFi / Web3 / Altcoins / Crypto

• The US House Ways and Means Committee released the 114-page Digital Asset Tax Certainty Act, a broad crypto tax bill scheduled for a Wednesday markup at 10 a.m. ET, with provisions covering stablecoins, mining, staking, lending and digital-asset accounting.
• The bill would create a $10 de minimis exception, a threshold below which certain transactions are exempt from tax reporting, for certain crypto transaction and network fees, apply simplified tax treatment to qualifying dollar stablecoins and widely traded digital assets from 2028, and extend wash-sale rules so losses can be disallowed when the same or a substantially identical digital asset is repurchased within 30 days.
• Mining and staking rewards would generally remain taxable as ordinary income, while the bill drops an earlier proposal allowing some newly minted tokens to defer taxation and would require the US Department of the Treasury to establish a Digital Asset Voluntary Disclosure Program within 12 months of enactment.

• Deutsche Bank plans to expand its digital-asset custody offering for institutional and corporate clients in Europe, using infrastructure from Taurus, a Swiss digital-asset technology company in which Deutsche Bank invested in 2023.
• The service is designed to let clients securely hold cryptocurrencies and tokenized financial assets through the bank, extending Deutsche Bank’s existing work with Taurus as institutional demand for regulated custody and tokenization grows.

• The US Department of Justice charged former Robinhood engineers Hefu Chai and Huaisong Xiang with commodities fraud and wire fraud, alleging they used confidential information about upcoming Robinhood Crypto listings to trade related perpetual futures on Hyperliquid before the announcements became public.
• Prosecutors say the two repeatedly took positions ahead of listings between 2025 and 2026, with each allegedly making more than $50,000 in profit.
• Each defendant faces one charge under the Commodity Exchange Act, carrying a maximum sentence of 10 years, and one count of wire fraud, carrying a maximum of 20 years, while Robinhood said it investigated the matter and reported it to regulators and law enforcement.

• CoinEx, a Seychelles-based crypto exchange, is shutting down after 9 years, citing a prolonged market downturn, declining trading volume and liquidity, and rising regulatory and compliance costs.
• New registrations stopped on Sept. 15, most exchange services will end on Sept. 29, and customers can withdraw assets until Dec. 22; remaining assets may be converted to USDT, with unclaimed USDT later transferred to independent custody charging 5% of the original balance per month.
• CoinEx, which served users across more than 200 countries and regions, set Aug. 22, 2028 as the final deadline for custody claims, while CEO Haipo Yang said he considered selling the platform before deciding to close it.

• Zcash (ZEC) holders voted to support reducing the network’s target block time from 75 seconds to 25 seconds, a change proposed under ZIP 218 for the planned NU7 upgrade that would cut confirmation latency by roughly 3x and increase transaction capacity.
• The proposal keeps Zcash’s existing Bitcoin-style halving schedule and overall ZEC issuance rate unchanged, meaning rewards per block would be adjusted downward to account for blocks being produced 3x more frequently, rather than increasing the amount of ZEC issued over time.

This Week's Calendar

Charts of the Day

Figure 1. Block Scholes BTC Risk-Appetite Index (white, left-hand axis) and BTC spot price (orange, right-hand axis). Source: Deribit, Block Scholes.

Figure 2. Block Scholes ETH Risk-Appetite Index (white, left-hand axis) and ETH spot price (purple, right-hand axis). Source: Deribit, Block Scholes.

Figure 3. BTC at-the-money implied volatility across selected tenors. Source: Deribit, Block Scholes.

Figure 4. ETH at-the-money implied volatility across selected tenors. Source: Deribit, Block Scholes.

Figure 5. BTC 25-delta put-call skew ratio across selected tenors. Source: Deribit, Block Scholes.

Figure 6. ETH 25-delta put-call skew ratio across selected tenors. Source: Deribit, Block Scholes.

Block Scholes is an FCA-regulated institutional crypto derivatives analytics platform. Live data, IV surfaces, and backtesting available via blockscholes.com.

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