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Senate crypto bill clears committee with surprise bipartisan votes

Tuesday, May 19, 2026 · from 2 podcasts, 4 episodes
  • The crypto regulatory Clarity Act advanced with two key Democratic votes, breaking Elizabeth Warren's unified opposition.
  • The bill would grant Bitcoin and Ethereum permanent non-security status, leaving other tokens in legal limbo.
  • A fight over banning officials from owning crypto is the largest remaining threat to the legislation.

The U.S. crypto regulatory stalemate just cracked. The Senate Banking Committee advanced the Digital Asset Market Clarity Act in a 15-9 vote, with Democrats Ruben Gallego and Angela Alsobrooks crossing the aisle to join all 13 Republicans. Host David Bennett on Bitcoin And argued this shatters the monolithic Democratic opposition front led by Elizabeth Warren, who claimed the bill “declares open season” on defrauding consumers.

The draft legislation creates a winner-take-all finish line. Any digital asset with a U.S.-listed spot ETF by January 2026 - effectively just Bitcoin and Ethereum - would be permanently barred from SEC classification as a security. For all other tokens, the bill introduces a “silence equals safe harbor” regime where an issuer’s filing becomes effective if the SEC fails to object within 60 days.

"The bill creates a two-tier system. The majors get the green light, while smaller projects remain stuck in a mire of regulatory uncertainty."

- David Bennett, Bitcoin And

The momentum shift is dramatic. Alex Thorn on Bankless increased his odds of the bill becoming law this year from 50% to 75% after the surprise votes. He notes Congress has only about nine weeks of session before the August recess to reconcile Senate and House versions. The path is narrow, but the bipartisan support provides critical velocity.

The most likely poison pill is an ethics provision. Democrats want a prohibition on elected officials and their families launching, owning, or profiting from cryptocurrencies. Thorn identifies this as the single biggest threat, as Republicans likely won't sign a bill that feels like a targeted attack on the sitting president’s family interests. The challenge is updating existing ethics rules to include crypto without appearing constitutionally contentious.

"If the ethics standoff is resolved, Thorn expects other minor issues to fall away quickly. It is the final high-stakes negotiation left on the table."

- Alex Thorn, Bankless

Other compromises are already baked in. To appease traditional banks, the bill prohibits yield on "idle" stablecoin balances but allows rewards tied to "user activity" - a semantic punt to future regulators. Dozens of other Democratic amendments, including Warren's targeting crypto mixers, were rejected. The bill now moves toward a complex merger with separate text from the Agriculture Committee, with the clock ticking.

Source Intelligence

- Deep dive into what was said in the episodes

Clarity Act Odds Jump to 75% After Surprise Senate Vote | Alex ThornMay 18

  • Alex Thorn views the Clarity and Genius Acts as foundational, analogous to the Securities and Exchange Acts of the 1930s which enabled a century of U.S. capital market dominance.
  • Thorn increased his odds of the Clarity Act passing this year from 50% to 75% after two Democrats crossed party lines in a Senate Banking Committee vote. The surprise yes votes came from Senators Ruben Gallego and Angela Alsbrooks.
  • The Genuis Act bans stablecoin issuers from passing yield to token holders, but allowed third parties to do so. The new compromise prevents third parties from paying rewards ‘solely in connection with holding idle balances’ or in a manner ‘functionally equivalent to bank deposits’.
  • Thorn argues banks are playing a cynical strategy, opposing even negotiated stablecoin yield compromises to delay crypto while building their own products. He sees this as moat protection, not a genuine economic concern.
  • The Clarity Act’s remaining legislative process is estimated to take seven weeks, with only about nine weeks of Congressional session available before the August recess and midterm election slowdown.
  • An ethics provision targeting government officials profiting from crypto is the biggest remaining hurdle. The White House opposes rules that solely single out the President or Vice President, requiring language that applies more broadly.
  • Galaxy research found that for every dollar of domestic deposit migration to stablecoins, US banks would gain $2 in foreign inflows and see a net increase in credit creation of 31 cents, countering bank objections.
  • The Clarity Act’s primary value is locking in policy for decades, reducing regulatory rollback risk. While agencies like the SEC provide interim clarity, a law provides entrepreneurial security and is the last leg of institutional adoption.
  • If the bill fails, Thorn expects it to be shelved quietly, not voted down dramatically. He views passage as a major upside catalyst but believes the industry would continue chugging along without it for roughly nine more quarters.
  • General-purpose blockchains like Ethereum and Solana stand to gain more from the Clarity Act than Bitcoin, particularly from provisions enabling tokenized securities and real-world assets, though all ecosystems will benefit.

Stretch Sketch | Bitcoin NewsMay 15

Also from this episode: (13)

Politics (6)

  • The Senate Banking Committee advanced the Digital Asset Market Clarity Act with a 15-9 vote, aiming to create a federal framework for digital asset trading, stablecoins, and intermediaries, splitting oversight between the SEC and CFTC.
  • Chairman Tim Scott framed the Clarity Act as a turning point to protect consumers, foster innovation in the US, and counter illicit financing, emphasizing its role in addressing a regulatory gray zone.
  • Senator Elizabeth Warren led opposition, arguing the Clarity Act was crypto industry-written, weakened investor protections dating back to 1929, preempted state anti-fraud rules, and enabled risky bank exposure to volatile crypto.
  • Democratic amendments to the Clarity Act, proposed by senators like Warren, Reed, and Van Hollen, aimed to strengthen sanctions against crypto mixers, block illicit stablecoin flows, and outlaw DeFi protocols used for money laundering, but were rejected.
  • Republicans, led by Senator Cynthia Lummis, argued that existing bill sections already tie digital asset intermediaries to the Bank Secrecy Act and expand Treasury's special measures authority, providing sufficient federal oversight.
  • Signal announced it may exit Canada if forced to comply with Bill C-22, a lawful access bill requiring surveillance capabilities that could compromise end-to-end encryption, with VPN provider Windscribe echoing similar concerns.

Protocol (5)

  • Macroeconomic factors, including rising 10-year US Treasury yields at 4.52% and April's 3.8% CPI, are driving Bitcoin's recent institutional sell-off, with analysts linking these to Middle East tensions and elevated energy prices.
  • MicroStrategy's STRC preferred stock, offering an 11.5% monthly dividend, saw a record daily trading volume of $1.53 billion, fueling the company's Bitcoin acquisitions and creating a predictable monthly ex-dividend cycle.
  • MicroStrategy plans to repurchase $1.5 billion of its 2029 convertible notes at a discount, paying $1.38 billion, listing available cash, equity offerings, and potential Bitcoin sales as funding sources.
  • Strive's SATA preferred stock will offer daily cash dividends from June 16, with a 13% annual rate effectively yielding 13.88% due to more frequent compounding, aiming to amplify Bitcoin holdings.
  • Thorchain halted all trading after a cross-chain exploit for $10.8 million, impacting deployments across Bitcoin, Ethereum, and BSC and causing its native token, RUNE, to drop 12%, prompting a warning about DeFi risks.

Macro (1)

  • Japan's 10-year bond yield reached 2.72% after a 3.5% rise, marking its highest level in a very long time, reflecting global bond market stress also impacting Dow Jones, S&P, and NASDAQ.

AI & Tech (1)

  • The Roundhill Memory ETF (DRAM) became the fastest-growing ETF in history within five weeks, tracking computer memory chipmakers like Micron, which the host views as an AI-driven bubble despite ongoing build contracts.

CLARITY Today? | Bitcoin NewsMay 14

  • The Senate Banking Committee is set to vote on the Digital Asset Market Clarity Act, which would grant the CFTC exclusive jurisdiction over spot digital commodity markets and the SEC authority over investment contracts.
  • A key compromise in the Clarity Act prohibits stablecoin issuers from paying interest-like yields, but permits activity-based rewards like cashback on payments.
  • Dozens of amendments were filed ahead of the Clarity Act vote, including one from Senator Jack Reed to eliminate the Blockchain Regulatory Certainty Act and others from Elizabeth Warren targeting the Trump family's crypto dealings.
  • The Bank of England is reconsidering proposed caps on sterling stablecoin holdings and a requirement for 40% of reserves to be non-interest bearing deposits at the central bank.
  • Tether's T3 crime unit says it has frozen $450M in assets linked to suspected criminal activity since 2024, with illicit crypto flows reaching a record $158B in 2025.
  • JP Morgan analysts note Bitcoin is gaining at gold's expense, with spot Bitcoin ETFs seeing three consecutive months of inflows while gold ETFs see outflows.
Also from this episode: (5)

Protocol (4)

  • Mara Holdings sold 21,000 Bitcoin for $1.5B, using $1B to pay down debt and funding a $1.5B acquisition of an Ohio power plant for AI data center development.
  • Nakamoto's stock fell over 99.5% after reporting a $239M quarterly loss, with revenues of only $2.7M; the firm sold 284 Bitcoin for working capital and still holds over 5,000 BTC.
  • An AI assistant helped a user recover 5 Bitcoin worth $395,000 by locating an old encrypted wallet file on a computer, not by cracking cryptography.
  • Analysts describe a potential 'STRC cycle' where MicroStrategy's preferred share issuances, which funded large Bitcoin buys, may drive mid-month price rallies.

AI & Tech (1)

  • David Bennett argues the AI capital rally is now absorbing speculative flows that previously went to crypto, breaking the 'AI rally lifts crypto' thesis.

Anthro Apology | Bitcoin NewsMay 12

  • Anthropic warns investors that tokenized products offering exposure to its private shares are invalid without board approval, labeling them as potential fraud.
  • The draft Clarity Act includes a provision barring the SEC from classifying any token serving as the principal asset of a US-listed spot ETF as of 01/01/2026 as a security, which would cover Bitcoin and Ethereum.
  • The Clarity Act draft creates a 60-day certification window where token issuers can submit evidence to the SEC; the agency's non-response effectively grants regulatory legitimacy.
  • German Finance Minister Lars Klingbeil plans to eliminate the tax exemption for digital assets held over 12 months, aiming to close a €98 billion deficit in the 2027 budget.
  • Three Tennessee men were federally indicted for a California crypto wrench attack spree, using delivery driver disguises to rob victims; one victim was forced to transfer $10M in Bitcoin and $3M in Ethereum.
Also from this episode: (5)

AI & Tech (1)

  • A PreStokes dashboard showed Anthropic with an implied valuation above $1.5 trillion, despite the platform holding only roughly $23 million in total assets.

Protocol (3)

  • Bitfarms, now Kiel Infrastructure, reported a $145 million net loss in Q1 2026 as it transitioned from Bitcoin mining to AI, selling 2,690 Bitcoin for $20 million in proceeds.
  • US Indo-Pacific Command confirmed it is running a Bitcoin node and experimenting with the protocol, citing its utility as a computer science tool for power projection.
  • Jason Lowrey's 'Soft War' thesis argues Bitcoin's proof-of-work creates a 'macro chip' that can project power in cyberspace, though critics contend it cannot secure data external to Bitcoin's own asset.

Business (1)

  • April CPI data showed prices rose 0.6% month-over-month and 3.8% year-over-year, with core CPI at 0.4% monthly and 2.8% yearly.