The crypto industry is bracing for a pivotal week as the CLARITY Act heads toward a Senate cloture vote, with two major market catalysts converging simultaneously.
Senate Republicans have released a 635-page proposed substitute for the entire CLARITY Act, authored by bill champions Senators Lummis, Boozman, and Scott, incorporating 126 changes specifically requested by Democrats.
The vote scheduled for Tuesday is a cloture vote, meaning the Senate is voting on whether to bring the bill to the floor for debate, not on the bill’s final passage itself.
Passing cloture requires 60 votes, meaning the 53 Senate Republicans would need at least seven Democratic votes, assuming full Republican support, which remains uncertain.
With Senator Mitch McConnell absent, Republicans effectively hold 52 votes, and several members have previously signaled opposition, raising the threshold to roughly eight Democratic votes needed.
A significant ethics breakthrough has emerged, with Republican senators stating that President Trump has agreed to approximately 80% of the Tillis-Gallego ethics proposal, which would restrict covered officials, judges, and spouses from issuing or sponsoring digital assets for compensation.
Under the updated provisions, qualifying ownership of at least $15,000 in crypto businesses would generally require divestment or placement in a blind trust, applying to equity in qualifying crypto businesses rather than just personal crypto holdings.
State attorneys general would also receive enforcement authority under the revised framework, including against intermediaries that knowingly list prohibited politician-linked assets, a concession Trump had previously resisted in favor of exclusive DOJ jurisdiction.
On the DeFi and developer front, the new draft specifies that developers who publish software without controlling user transactions would not be treated as money transmitters solely for writing or maintaining that software, and the bill continues to protect lawful self-custody through the keep your coins provision.
The stablecoin yield debate, which effectively derailed the bill in December when Coinbase CEO Brian Armstrong declared that no bill was better than a bad bill, remains a sticking point, with platforms still prohibited from paying passive yield simply for holding stablecoins.
A notable new provision grants Treasury a one-time 18-month window after enactment to determine whether stablecoin rewards are causing substantial deposit losses at community banks with less than $10 billion in assets, with authority to act if significant deposit flight occurs.
Prediction markets on Kalshi currently place the probability of the CLARITY Act becoming law before October 1, 2026 at just 11%, reflecting widespread skepticism that the bill will clear all legislative hurdles in the near term.
Meanwhile, Strategy (NASDAQ: MSTR) repurchased $139 million worth of STRC shares, leaving its Bitcoin holdings unchanged, pushing STRC back toward par value with shares last trading above $98.
Strategy holds 845,050 Bitcoin and did not sell any MSTR shares or Bitcoin in connection with the STRC repurchase, continuing its recent pattern of using available cash reserves to shore up its preferred share structure.
In a separate development, Metaplanet announced a 41% cut to its executive reward pool, reducing potential shares under its Series 10 rights from 319.5 million to 188.2 million following significant shareholder backlash over executive compensation tied to share dilution.
Metaplanet CEO Simon Gerovich stated the change eliminates more than 220 million in potential warrant value and raises Bitcoin per diluted share by approximately 8.8%, introducing what may become a new standard metric for evaluating Bitcoin treasury companies.
On the security front, a group calling itself Revolut Smilick claimed responsibility for a data breach at Revolut, demanding payment of 10,000 Bitcoin after allegedly using a fraudulent email on a legitimate government agency domain to extract customer data.
Revolut responded to the fraudulent request by providing high-net-worth customer identity documents, verification selfies, addresses, account statements, and Bitcoin transaction histories and balances to the attackers, representing a severe exposure of sensitive financial and personal information.
