CLARITY odds narrow as bill enters the final straight
Galaxy Digital has lowered its estimate of the CLARITY Act’s chances of passing in 2026 to just 10%. In May it had estimated the chance of passage at 75%.
Multiple political issues remain unresolved and the Senate only has 14 days in session to pass the bill after it reconvenes on Sept. 14.
Unless an initial motion to proceed vote occurs immediately upon lawmakers’ return to Washington, there would only be enough time for the CLARITY Act to pass if it “dominates basically the entire working session,” wrote Galaxy head of research, Alex Thorn.
If the bill doesn’t pass, the SEC and CFTC plan to step into the breach by issuing their own rules for crypto markets. The SEC scheduled an open meeting on Friday to unveil its “clear rules of the road” but then cancelled it due to an “an unforeseen scheduling issue.” The White House was reportedly unhappy that the SEC going rogue on crypto rules could anger Democrats and scuttle the delicate negotiations underway to pass CLARITY.
SEC chair Paul Atkins, President Donald Trump and a series of big wigs from Coinbase, a16z, Ripple, Chainlink, NYSE and Nasdaq will meet at the White House on Wednesday to discuss crypto regulation and explore ways to get the bill over the line.
The following day the US Commodity Futures Trading Commission’s new Innovation Advisory Committee will meet to discuss regulation of crypto, AI and prediction markets.
Crypto companies seek access to frontier AI cybersecurity capabilities as fears of more hacks grow
Cryptocurrency companies including Anchorage Digital, BitGo, Bitwise, Blockstream, Ledger and Trezor have urged frontier artificial intelligence (AI) labs to give Bitcoin developers early access to their most capable models.
An open letter, published by the Bitcoin Policy Institute said Bitcoin Core devs and other crypto developers are being blocked by guardrails on publicly available frontier systems, leaving them to rely on less capable open-weight models.
“Without dedicated access programs, defenders may lack the tools needed to keep pace with evolving threats to the infrastructure they maintain.”
The threat from AI identified exploits has become a key focus after $116 million was stolen from Coldcard hardware wallets. The Bitcoin Red Team subsequently used AI to identify thousands of potential cybersecurity issues using open source Chinese models.
New threats to hardware wallet owners have continued to emerge over the past few days, with the personal details of more than 50,000 users leaked in two separate incidents. Trezor reported a breach of personal data affecting about 14,000 users through its shipping provider, ShipMonk. Users who received its products from the US, UK, Sweden, Colombia, Brazil, Italy, and Portugal between May 10 and Aug. 8 are now at high risk from potential phishing attacks using their personal information.
Cryptocurrency wallet provider SafePal has also just disclosed its own data breach that saw unauthorized access to almost 40,000 customers’ order information, including names, addresses and purchasing data. It has since identified and taken down more than 30 fraudulent websites and phishing links tied to the breach.
CFTC and states battle over who gets to regulate prediction markets like Kalshi and Polymarket
The US Commodity Futures Trading Commission (CFTC) has ordered prediction market Kalshi to continue operating normally and to ignore New York’s restraining order.
The CFTC said that New York’s enforcement action against Kalshi for operating an illegal gambling business constituted a market emergency as it would bar Kalshi from operating prediction markets nation-wide. It believes the Commodity Exchange Act requires the CFTC to provide a uniform national derivatives market with CFTC Chair Michael Selig saying that Congress did not intend derivatives exchanges to face a “patchwork of state gaming laws.”
A few days later a Washington state judge ordered prediction market platform Kalshi to stop operating in the state and rejected its argument that federal commodities law preempts Washington gambling law. Kalshi must implement IP-address and residency-based geofencing by Aug. 19 and a GeoComply multi-source geofencing system by Sept. 2.
Even the New York City Council is throwing its hat into the ring by launching an an investigation into prediction market firms to examine whether they used “false and deceptive marketing” through influencers to target young adults.
Ethereum Foundation revamps post-quantum plan and decides on scope for Hegota hard fork
The Ethereum Foundation is moving away from the Poseidon hash function in its planned post-quantum architecture, according to researcher Justin Drake.
On Thursday, Drake said the foundation would instead rely on established alternatives such as SHA or BLAKE.
Poseidon is a relatively new hash function tailored to work better with zero knowledge proofs in order to…
cointelegraph.com