Galaxy Research Cuts CLARITY Act Odds To 10% Ahead Of White House Meeting
US crypto legislation has entered a window of inaction: the CLARITY Act's odds dropped to 10%, and the SEC pulled its Aug. 14 rulemaking meeting. Market attention now moves to the White House meeting on Aug. 19. On the issuer side, compliance advanced — World Liberty received conditional OCC approval and Tether closed out its audit promise — while Neutrl's redemption pause showed reserve transparency remains the industry's weak spot.
Trend One: US regulation in limbo, focus shifts to the White House
On Aug. 14, Galaxy Research cut its estimate of the CLARITY Act passing in 2026 to 10%, from 50% on June 26, 60% on June 6, and 75% on May 22. Head of firmwide research Alex Thorn cited unresolved ethics rules, stablecoin yield provisions and developer protection, plus a Senate window of only about two to three weeks after it reconvenes on Sept. 14. The bill cleared the Senate Banking Committee in May but drew pushback from most Democrats and the banking industry over stablecoin yields.
The same week, the SEC cancelled the open meeting scheduled for Aug. 14 at 10 a.m., where it planned to propose Regulation Crypto, its first substantive digital-asset rulemaking. The Sunshine Act notice was posted Aug. 13 with no replacement date. A source said the companion "innovation exemption" for tokenized securities was also being delayed, partly over concerns it could complicate CLARITY Act negotiations on tokenization; the framework had been under White House review at OIRA since April.
With Congress stalled, the calendar shifts to the executive branch. On Aug. 14, Semafor reported that executives from Coinbase and Ripple — plus a16z, Chainlink, Paradigm and Kalshi — are expected at a White House meeting with crypto and prediction-market executives on Aug. 19, with President Trump likely to attend alongside CFTC Chair Mike Selig and SEC Chair Paul Atkins. The event is described as a kickoff for the CFTC's Innovation Advisory Committee, whose inaugural meeting on Aug. 20 will cover crypto regulation, AI and prediction markets. Polymarket priced the chance Trump signs CLARITY this year at 19%. Galaxy's Thorn said he expects the SEC to publish the texts of Reg Crypto, the Innovation Exemption, or both in the coming weeks regardless of the bill's fate.
Trend Two: Issuers — charters and audits advance, transparency gap persists
On Aug. 14, the OCC granted World Liberty Financial preliminary conditional approval for a national trust bank charter, in a letter dated the same day. World Liberty Trust Company, N.A. must hire a qualified internal audit manager, maintain at least $20 million in capital and notify the OCC of significant business-plan changes before final approval. If approved, the bank would consolidate issuance, custody and reserve management of the USD1 stablecoin (market cap about $4 billion, the fourth-largest stablecoin) under federal supervision, reducing reliance on partners such as BitGo. Ripple, Fidelity, Paxos and Circle previously received conditional approval; Circle's full approval came last month. Senator Elizabeth Warren said Trump is "the first President in history to approve, operate, and supervise his own bank."
On Aug. 13, Tether said KPMG U.S. issued an unqualified opinion on the 2025 financial statements of Tether International, S.A. de C.V., the USDT issuer. The audit covered the year ended Dec. 31, 2025, under AICPA standards; reserves exceeded liabilities by $6.814 billion, and KPMG physically counted every gold bar Tether holds. USDT's market cap exceeds $180 billion, which triggers the annual-audit requirement of the GENIUS Act signed in July 2025. Tether has not published KPMG's report. The company has promised an audit since a 2017 engagement with Friedman LLP ended without a report; in 2021 it paid $18.5 million to settle with the New York Attorney General and $41 million to the CFTC. On the same day, Tether announced USA₮, a US-regulated stablecoin, and CEO Paolo Ardoino denied plans for a proprietary blockchain.
The contrast case came the same week. On Aug. 13, DeFi protocol Neutrl suspended minting and redemptions of its NUSD synthetic dollar after unspecified circumstances affected protocol reserves; it did not identify the affected asset or counterparty, and paused other functions on legal advice. Structured-yield protocol Strata followed for its Neutrl market. NUSD circulation was about $53.6 million; its market cap was down 18.4% over 30 days and monthly transfer volume fell 72.4% to $71.4 million. Risk-advisory team BA Labs had classified a proposed Neutrl integration as higher risk in February, citing counterparty, operational and liquidity exposure, with more than 87% of reserves held through Fireblocks at that time.
Compliance pressure is also widening geographically. On Aug. 13, Ireland published its first national anti-money-laundering strategy, running to 2030, which brings "enhanced checks" on transfers involving private crypto wallets and stricter due diligence on overseas crypto firms under the remaining elements of the EU Transfer of Funds Regulation. Separately, Binance said it will restrict transfers with 16 platforms — including HTX and EXMO — starting Aug. 23, tied to the EU's latest sanctions lists covering Iran and Russia.
Trend Three: Payments and RWA — penetration diverges
On Aug. 13, the ECB published a survey of 8,205 businesses across 21 euro-area countries: just 0.2% of companies selling online accept crypto assets, and acceptance at physical points of sale stayed below 1% in both 2024 and 2026. Cash remains the most widely accepted method at 92%. Mobile payments jumped to 68% acceptance in 2026 from 36% in 2024, led by instant payments and digital wallets. The ECB named Bitcoin, Ether and USDT as examples in its questions.
Stablecoin payment companies face their own frictions. On Aug. 14, Bloomberg reported that Hong Kong-based RedotPay has pushed its US IPO beyond 2026 — to 2027 or later — while it pursues regulatory approvals and defends a nearly $473 million lawsuit filed in Hong Kong by Binance-linked entities alleging the founders used confidential information from their Binance work to build a competing card business and diverted more than 470,000 Binance Card customers. The company had sought to raise over $1 billion at a valuation above $4 billion, with JPMorgan, Goldman Sachs and Jefferies advising. RedotPay said it obtained a US money transmitter licence this week; it reported 8.5 million users in Q2 2026 and about $180 million in annualized revenue.
Tokenized equities, by contrast, are scaling. RWA.xyz data published Aug. 14 showed tokenized-stock holders more than doubled to 1.31 million, monthly transfer volume surged about 179% to $23.13 billion, and total distributed value rose 5.9% to $2.38 billion. Ondo leads at about $872 million, followed by Kraken's xStocks at $557.8 million and Binance's bStocks at $521.8 million, the latter launched in June. On the transaction side, NOWPayments data showed USDT still leads stablecoin trading volume, with USDC's share continuing to rise.
Trend Four: TradFi structures — indices, ETF flows and leverage
On Aug. 14, MSCI opened a consultation that could remove "non-operating companies" from its indices, putting Bitcoin-treasury companies Strategy and Metaplanet at risk of exclusion from global benchmarks.
Institutional ETF positions grew the same week. JPMorgan's 13F, filed Aug. 12 for holdings as of June 30, showed about 10.4 million shares of BlackRock's IBIT (roughly $356 million), up about 25% from 8.3 million in Q1, and its Ethereum ETF position more than quadrupled to about 1.17 million shares. It also reported small new positions in XRP products and trimmed Bitcoin miner stakes. Abu Dhabi's two sovereign funds kept their IBIT shares through Q2 — a combined roughly $763 million — even as the position lost about $118 million in value, according to CryptoSlate.
Leverage is queuing up at the product level. On Aug. 14, Cboe filed with the SEC to list the first triple-leveraged Bitcoin and Ethereum ETFs in the US, issued by Volatility Shares, which already runs the 2x products BITX ($846 million in net assets) and ETHU ($723 million) approved in June 2023. The filing lands amid weak flows: SoSoValue data showed Bitcoin ETFs recorded $389 million in outflows from Aug. 10 to Aug. 14, after $853 million of inflows the prior week, with Bitcoin around $63,000.