Despite support from Goldman Sachs, Fidelity and law enforcement bodies, the Clarity Act’s chances dim. BitMEX to close as crypto consolidates into five big players.
Despite wealthy memecoin entrepreneur President Donald Trump agreeing to an ethics deal, the Clarity Act (CLARITY) is floundering as the August recess deadline looms.
Senate Majority Leader John Thune said he doesn’t believe the act has the votes to pass just yet, but may bring it to a vote anyway to “get Clarity started. We’ll see where the votes are.”
The ethics deal would prohibit all US officials from issuing or sponsoring digital assets, but contains some “get out of jail free” provisions for the President that the Democrats are unhappy with, including the fact the rules expire the day he is scheduled to leave office in 2029.
The ethics provisions will also be enforced by the Attorney General that Trump appointed. The Democrats instead want state Attorney Generals to enforce it — but Trump seems unlikely to agree to empower dozens of state AGs to attempt to prosecute him.
The White House described the bill as the “most comprehensive and wide-ranging ethics provision in history,” while Democratic Senator Ruben Gallego described it as a “piece of s---” and “not a serious effort.”
Negotiations are continuing to find a deal both sides can live with, but given the lack of trust, it’s not going to be easy to find a compromise. Goldman Sachs CEO David Solomon conceded the bill is “not perfect” but has supported it anyway, along with Fidelity and Charles Schwab who represent many trillions in assets under management each.
Law enforcement organizations have also begun to signal support, with The National Fraternal Order of Police representing hundreds of thousands of members, stating the latest version of the BRCA (which protects developers of decentralized protocols) would not impede investigations into money laundering and fraud.
The odds of the bill passing this year are at 38% on Polymarket.
BitMEX, one of the pioneers of cryptocurrency derivatives trading, announced it will shut down operations in September after 11 years.
BitMEX launched in 2014 and became known for introducing the 100x leverage perpetual swaps.
In recent years volumes have tanked increased competition from major exchanges like Binance and decentralized protocols like Hyperliquid. CryptoQuant CEO Ki Young Ju said BitMEX’s share of the Bitcoin futures market has fallen to just 0.08%, with roughly $84 million in daily trading volume.“It was a great exchange that helped shape the industry, and now it is passing the torch to the next generation of exchanges it inspired,” Ju said.BitMEX’s utility token BMEX collapsed in value after the announcement. That same day, news emerged of a class action lawsuit accusing the crypto derivatives platform of fraudulently engineering customer liquidations to seize traders’ collateral. BitMEX denied the allegations and said it had successfully defended itself against similar claims in the past.Restructuring adviser Roshan Dharia told Cointelegraph the exchange’s demise shows the industry is consolidating.
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