BS Summary: This article contains 28 faulty reasoning types, including Biased Writer Voice, Confirmation Bias, and Fundamental Attribution Error, with Negativity Bias as the most egregious example at 31.4% saturation with 582 hits. Analysis detected 3,232 faulty-reasoning hits from 1,853 analyzed words, generating a BS Score of 50.1% and a BS Rank of 50% (10,708 of 21,188 articles). This article is better (less manipulative) than 50.50% of the article peer group.
At the end of June, crypto super PAC Fairshake had almost $127 million cash on hand , second among outside campaign groups only to the primary Republican PAC, the Senate Leadership Fund.
The crypto industry has already spent $189 million on House and Senate races this year on top of $133 million spent during the 2024 cycle, according to campaign finance disclosures.
While they struggle to maintain consumer interest in their product, crypto has gone all-in on political spending as a top business strategy.
“There’s no secret that what they’re up to is trying to use their hundreds of millions of dollars to buy influence and buy the result they want,” said Sen.
Chris Van Hollen (D-MD) in an interview.
A year ago, that strategy paid off with the passage of the GENIUS Act, which created a light-touch regulatory structure for stablecoin, a type of cryptocurrency pegged to U.S. dollars and similar assets, drawing digital assets further into the traditional financial world.
It was the dawn of a new, brighter era for digital assets.
With a like-minded Republican Congress and a president who, on top of the hundreds of millions in donations from the industry, had his own direct financial interest in crypto’s success, the industry expected the GENIUS Act to be just the beginning.
The next step: get the Digital Asset Market Clarity Act, a deregulatory market structure framework, onto the president’s desk.
It’s now been over a year since the GENIUS Act was signed, but the crypto industry’s dreams haven’t quite panned out.
The CLARITY Act made it out of the House, but is still stalled in the Senate, with only a week left before its chances of survival drop precipitously.
This month has seen an extravaganza of powerful monied interests on Capitol Hill—on opposite sides of the issue.
The crypto lobby hopes to muscle through legislation they see as their way into the mainstream financial system; Wall Street has been using its own powerful lobbying arm to slow down the CLARITY Act’s progress, over concern of deposit flight to stablecoin issuers.
Law enforcement groups are also concerned about a lack of anti-fraud and anti-money laundering protections.
But ironically, it is the industry’s most important ally in the federal government and the face of crypto corruption himself, Donald Trump, who has presented the biggest roadblock.
Crypto has gone all-in on political spending as a top business strategy.
The problem lies with the very reason Trump, who once called Bitcoin a “scam,” is suddenly on board with the crypto industry: his personal profits.
Spurred by Trump’s recent financial disclosure revealing he raked in over $1.4 billion from his various crypto ventures—including crypto firm World Liberty Financial and a personal memecoin—Senate Democrats, even those who are pro-crypto (or at least pro-crypto campaign cash), have repeatedly refused to vote for the CLARITY Act without clear conflict-of-interest rules for senior government officials, including the president.
And Trump won’t sign anything that limits his ability to profit from crypto schemes while in office.
The crypto industry is learning a valuable lesson: partnering yourself with a man who bases his values on whatever happens to fill his coffers the most may not be the best way to fill your own coffers.
On Wednesday, top crypto enthusiast Sen.
Cynthia Lummis (R-WY) released a new draft of the CLARITY Act that included an ethics provision she “negotiated” with Trump.
Given the absence of any Democrats at the negotiating table, it’s no surprise that the language falls dramatically short of a serious proposal to limit Trump’s corrupt crypto-related activities.
To Van Hollen, the proposed ethics provision is “woefully inadequate … It would allow President Trump to continue doing exactly what he’s doing, and he’s been engaged in crypto corruption in many ways,” he told the Prospect .
The proposed language prohibits government officials, including the president and members of Congress, from issuing or sponsoring digital assets during their term.
But it gives exclusive enforcement authority to the U.S. attorney general, while excluding any state attorneys general or private actors.
Even if acting attorney general and Trump’s former personal attorney Todd Blanche doesn’t survive a confirmation vote, no one is holding their breath for a replacement nominee to go after Trump on any violations of the rules, which would only result in a fine of $500,000, which amounts to 0.03 percent of the amount Trump has already gained from his crypto forays.
What’s more, the proposal sunsets at noon on January 20th, 2029, and any violations before then cannot be prosecuted.
So any attorney general after Trump leaves office would be similarly powerless.
Even without the enforcement concerns, the proposed language would hardly prevent the president from continuing to make a killing off of crypto.
“Had this been the law before Trump started his crypto activities, the only thing this ethics provision would do is create some mild paperwork burdens to allow his sons and family to be the ones who received the monetary benefits of these arrangements instead of he or his wife,” explains Corey Frayer with the Consumer Federation of America.
The language is so weak that even those straining to peer over their millions in crypto industry donations caught it.
“The Republican-proposed text of the CLARITY Act as it currently stands falls short,” read a statement released shortly after the new draft on Wednesday from a group of pro-crypto Democrats in the Senate.
Sen.
Thom Tillis (R-NC), a banking industry ally, also says he won’t vote for the bill without stronger ethics language.
If Trump agreed to stronger ethics provisions, the CLARITY Act would be in a much better position, and so would Trump’s businesses.
“Trump crypto businesses are a tapeworm on the broader industry,” Frayer, who used to work for the Senate Banking Committee, said.
“Anything that’s good for the industry is ultimately good for Trump’s crypto ventures.”
Still, Mr.
Art of the Deal won’t agree to merely putting his digital assets in the hands of someone else for a few years—such as his children, who are already managing much of the family crypto business—while the light-touch market structure regulation promises to boost the stockpile waiting for him when he’s done.
“Trump crypto businesses are a tapeworm on the broader industry.”
It’s been difficult for the crypto industry to balance its relationship with Trump and its desperation to get the CLARITY Act signed into law.
“Look, whatever you decide on ethics, that’s really not our concern.
That is politics.
That’s Congress,” Blockchain Association CEO Summer Mersinger told the crowd at a crypto summit shortly before the latest draft was released.
Behind the scenes, it’s been difficult for the industry to grapple with the reality that a major roadblock to the growth they expect from the CLARITY Act is their own captured president’s self-interest.
Whispers of discontent are audible to some inside the crypto world, but voicing frustrations out loud is a big risk for an industry that has tied itself so closely to the administration.
“At the end of the day, the crypto industry is as much a political movement as it is a financial movement,” said Frayer.
And right now, a lot of crypto’s political power comes from their relationship with Trump.
It’s not the first time crypto insiders have had to stifle their discontent.
When the world of crypto was publicly extolling the virtues of the president they helped elect, for example, the announcement of Trump’s memecoin launch incited a wave of silent outrage within the industry.
“This is a horrible look for the industry already trying to make the case that we’re not a bunch of hucksters, scammers, and fraudsters,” an anonymous lobbyist told Politico at the time.
If the CLARITY Act fails and Democrats do well in the midterms this November, the industry might need to reevaluate their priorities.
Some see an industry-wide shift in rhetoric surrounding Trump as a real possibility.
The banks are waging a leftover fight from the GENIUS Act, which left open a loophole allowing stablecoin issuers to offer “rewards” on their deposits that act functionally the same as yields offered on traditional consumer deposits.
The concern is that stablecoin yield will siphon away the cheap deposit base banks partially rely on to extend loans and otherwise keep their profit machine churning.
Stablecoin issuers have already been taking advantage of the yield loophole left open in GENIUS; PayPal, for example, offers 4 percent yield on its stablecoin PYUSD.
So banks have even more incentive to use the CLARITY Act to head off increased competition from a challenger playing by an entirely different set of rules.
Wall Street had been successfully mucking up the works in the Senate Banking Committee until an agreement was reached ahead of a 15-9 vote to advance the bill to the floor.
The compromise made some attempt to limit rewards that act as deposits, but banking groups say it doesn’t go far enough to protect their deposit base.
According to Paul Merski, head lobbyist for the Independent Community Bankers of America, any so-called “agreement” is just a myth.
“The banking sector never supported any compromise on that language, but they just moved ahead anyway,” he told the Prospect .
Wednesday’s draft made no attempt to address those concerns, but now that members of the Senate who have been up until now fairly uninvolved in the CLARITY Act discussions are learning more about the banking industry’s concerns, the stablecoin yield question presents another obstacle, even among Republicans.
Sens.
John Cornyn (R-TX) and John Curtis (R-UT) have expressed public concern .
Yet another wave of opposition centers around protections for decentralized finance, which critics say leave open several gaps in money laundering and financial crime enforcement.
Sen.
Lummis’s draft claims to address these concerns, but “the reality of what they’ve done is established a set of task forces and committees that will not do anything,” said Frayer.
“These are unserious revisions to an unserious bill.”
All told, the odds aren’t looking great for the CLARITY Act’s chances of success.
The Senate is scheduled to go on recess on August 7, and it may well be a week earlier, as often happens during an election year.
In the likely outcome that the bill falls short before then, Congress will only have a short window before the midterms.
After that, it’s a whole new ballgame.
The crypto sector may be desperate, but they haven’t given up.
“As we speak, they’re spending tens of millions, hundreds of millions of dollars in elections around the country through their super PACs to try to elect candidates who will do their bidding rather than the public’s bidding,” Van Hollen said.
A campaign bazooka is the only way crypto knows to advance their agenda and make their industry competitive, as trust and interest among everyday Americans remains on the floor.
It’s why they need powerful allies who don’t worry about the actual concerns of their constituents.
“My phones are not ringing off the hook from my constituents demanding that we pass the CLARITY Act,” Van Hollen points out.
“Any consumers who know about this are against it.”
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