#CLARITY Act Progress and Regulatory Landscape

Senator Lummis is pushing for the CLARITY Act, which aims to establish self-custodied assets as non-fungible and authorize the freezing of suspicious funds. Fidelity and other institutions are calling for its passage to boost confidence. Republicans plan to advance it before the August recess, but they need to overcome a 60-vote threshold. Democrats have doubts about certain provisions, and both parties are negotiating the details. Stand With Crypto has launched a million-dollar lobbying campaign, while Coinbase’s CEO describes the 100 days leading up to the midterms as a critical period, with legislative outcomes still uncertain.

The CLARITY Act introduces new protections for self-custodied tokens, stipulating that such tokens cannot be deemed lost property due to being dormant on the blockchain, and establishes the principle that federal law takes precedence over state laws. The founder of Aave stated that the bill is now in the final approval stage, and if passed, it will bring regulatory certainty to DeFi and attract institutional capital; the team is actively pushing for its implementation. Meanwhile, the CFTC has warned that prediction market companies must submit more detailed information to assess compliance.

Fidelity manages assets worth $7.1 trillion, and its public policy division is urging the Senate to accelerate the legislative process for the CLARITY Act, which aims to establish a federal regulatory framework for digital assets. Although Republicans hold a majority, the bill requires 60 votes to pass. It currently faces challenges due to disputes over ethical provisions and concerns regarding Trump’s substantial earnings from cryptocurrencies, prompting strong opposition from Democrats and hindering progress on legislation.

Although the CLARITY Act has backing from law enforcement and religious groups, its approval odds have plummeted to 30% due to a lack of Democratic votes and a tight schedule. Galaxy Digital warns that deliberations must begin by July 30, otherwise progress is unlikely before the Senate’s summer recess. The majority party leader confirmed it will be difficult to finalize the bill by August, delaying a critical window for the industry and reducing the chances of legislation passing in 2026.

With negotiations over ethical provisions stalled and the White House remaining silent, the window for a Senate vote on the CLARITY Act is narrowing rapidly. With only 14 working days left before the August recess, the chances of passing the bill have significantly diminished, raising concerns that it may miss the final legislative deadline. Although Aptos’ CEO argued that the bill would eliminate legal ambiguities and encourage institutional participation, the current legislative process has hit a dead end, turning expectations of passage this year into pessimism.

With the prediction market expected to boom during the World Cup, Kalshi saw a surge in daily active users thanks to its compliance advantages, overtaking Polymarket with a 73% market share. Data shows that prediction markets now account for 27% of the legal gambling market in the U.S., significantly eroding the share of traditional gambling giants and triggering a notable shift in the industry’s competitive landscape.

A year after the House passed the CLARITY Act, it remains pending review in the Senate. Senator Lummis confirmed that the Senate version is ready and the text will be made public soon. This move marks a shift from legislative deadlock to the stage of disclosing the actual text, laying the groundwork for subsequent voting. Previously, the GENIUS Act was stalled due to unresolved regulatory issues, prompting industry calls for the CLARITY Act to establish a clear regulatory framework for decentralized mechanisms. Lummis emphasized that the bill will distinguish between truly decentralized systems and bank-style regulation, helping solidify the United States’ leadership in the crypto sector.

Affected by the deadlock in Senate deliberations and disputes over ethical provisions, the chances of the CLARITY bill passing this year have dropped significantly. Data from Polymarket shows its approval probability has fallen to a record low of 32%. Although Lummis pushed for this bill to establish token rules and capital isolation aims at resolving regulatory conflicts and preventing FTX-style collapses, the current legislative process faces severe challenges, hindering efforts to rebuild market trust.

CFTC Chair J. Christopher Giancarlo has backed the CLARITY Act, arguing that establishing a forward-looking regulatory framework is crucial for the U.S. to maintain its leadership in crypto. However, the $1.4 billion in crypto revenues hearing prompted five Democratic senators to demand an investigation into Trump’s financial interests and national security risks, slowing down progress on the bill. Despite being on the agenda with an August deadline, issues such as insufficient voting support, debates over ethical provisions, and concerns about regulatory gaps remain. If the July voting window closes, the legislative process could be delayed for years, sparking significant division in the market.

SEC Chair Atkins unveiled a roadmap for 2026, planning to introduce the U.S.’s first crypto regulations in July to advance Trump’s goal of establishing the country as a crypto hub. The new rules would amend broker capital requirements and issue guidelines for tokenized securities, aiming to introduce safe harbor mechanisms to replace enforcement actions. While receiving some support, the initiative has been criticized by Democrats for potential conflicts of interest, with markets closely watching whether it can secure passage of the CLARITY Act by August 7.

U.S. District Judge Torres in the Southern District of New York ruled that New York’s gambling laws apply, dismissing Kalshi’s request for an injunction. This decision set a precedent for state-level regulation, directly leading to a surge in compliance costs for prediction market platforms. As the case moves into the motion-to-dismiss phase, it has intensified the conflict over jurisdiction between federal and state authorities, with multiple states simultaneously imposing pressures that force platforms to adjust their compliance strategies.

Securitize plummeted by nearly 25% on its first trading day on the NYSE via the SPAC mechanism, with its stock price further halving over the first week of trading, suffering a 40% decline. Analysts attribute these sharp fluctuations to the shift in SPAC shareholder behavior and the risks associated with reevaluating industry valuations. Meanwhile, competitor tZERO promptly filed patent lawsuits, sparking a patent war within the tokenization industry. This development signals a new phase in industry competition, where primary market endorsements lose their impact in the secondary market, warning investors about the risk of valuation bubbles bursting.

Four major law enforcement agencies, including the NDAA, have shifted from opposition to neutrality by sending letters to the Senate in support of H.R.3633, the CLARITY Act, thereby removing key legislative obstacles. Although the bill missed the July 4 deadline, August 7, before the recess, remains a critical threshold. With the White House considering the establishment of a Bitcoin reserve and the SEC releasing its regulatory plan for 2026, the U.S. crypto regulatory landscape is showing significant improvement, accelerating the pace of legislative implementation.

Securitize announces the completion of over $400 million in funding to acquire complementary companies and expand its institutional tokenization services platform. Seventy percent of these funds will be allocated to M&A activities, marking a crucial step in solidifying its position as a leading issuer and significantly enhancing the platform’s competitiveness and market influence in the field of equity tokenization.

The originally planned signing on July 4th has fallen through, and House deliberations have stalled. All parties must reach an agreement by August 7th; otherwise, significant revisions may be required after the midterms.

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Driven by the World Cup in June, the combined trading volume of Kalshi and Polymarket reached $44.8 billion, with Kalshi alone contributing over $31.5 billion. Its nominal trading volume doubled to $32.6 billion, hitting a record high. After obtaining DCM authorization, Kalshi’s perpetual contract volume surged 25 times, prompting lawsuits from traditional financial institutions. Meanwhile, the CFTC is investigating allegations of volume manipulation at Polymarket, while Nasdaq distributes TotalView data via the Pyth blockchain.

Tokenization platform Securitize has officially listed on the New York Stock Exchange under the ticker symbol SECZ. This listing aims to leverage DeFi technology to streamline asset issuance processes and reduce intermediary costs. The funds raised will be specifically used to enhance compliance infrastructure and expand business operations, marking a significant market breakthrough in mainstream asset tokenization within a compliant framework.

Senate leaders are pushing for a vote on the CLARITY Act in July to clarify the jurisdictional boundaries between the SEC and CFTC, but the urgency of this legislation has raised concerns in the market. JPMorgan’s analysis shows that the odds of the bill passing have plummeted from 70% to 48%, potentially leading to volatility in the crypto market and slower investment by traditional institutions. Meanwhile, the CFTC has launched a full-scale investigation into Polymarket amid allegations of fraudulent videos under Rule 1105, putting the platform under severe regulatory pressure. JPMorgan also warns that yield-stablecoins could evolve into shadow banks, emphasizing that innovation must not bypass risk management frameworks.

The merger deal between Securitize and Cantor Equity Partners II was approved unanimously by shareholders and is expected to be finalized within this week. The new entity will list on the NYSE under the ticker SECZ on July 2, with its stock price surging by 20% in its first trading day. This listing marks the official entry of tokenization platforms into mainstream exchanges and represents a significant milestone in the realm of RWA.

At the prosecution’s request, a Michigan court issued a temporary injunction against the Kalshi sports prediction platform, prohibiting it from providing services to residents within the state. The ruling stipulates that the platform could face hefty daily fines of $120,000 if it violates the order. This move signals an escalation in jurisdictional conflicts, leaving industry regulation in limbo amid surging sports betting volumes reaching $9.5 billion during the World Cup.

Tokenization platform Securitize plans to raise $400 million through a SPAC merger and is set to debut on the NYSE on July 2. Backed by traditional financial giants such as BlackRock, this funding round signals strong recognition of the RWA sector from conventional capital.

Under pressure from housing and defense bills, the Senate’s legislative timeline in July has been drastically reduced to just 20 days. Although Republicans are accelerating efforts to pass the bill before the August recess, the compressed schedule and intensified competition over other priorities make securing 60 votes uncertain. With the White House and industry groups deeply involved in negotiations, regulatory clarity remains in doubt, posing serious challenges to the bill’s passage this month.