White House Convenes Crypto Leaders as CLARITY Act’s Passage Odds Collapse
Regulatory prospects for comprehensive crypto legislation have darkened sharply, with Galaxy Digital estimating just 10% odds of passage this year—down from 75% in May. Yet industry representatives, including Ripple executives, are meeting with the White House this week as hardware wallet users face fresh security threats.
The cryptocurrency industry faces a regulatory reckoning. Galaxy Digital has sharply downgraded its assessment of the CLARITY Act’s path to passage, now estimating just a 10% chance the bill will pass in 2026, down from 75% just a few months ago. The pivot reflects mounting political headwinds and dwindling legislative time.
The CLARITY Act’s Shrinking Window
The timeline tells the story. When Congress reconvenes on September 14, the Senate will have only 14 days remaining in its session. For the CLARITY Act to pass, an initial motion to proceed would need to occur immediately upon lawmakers’ return, and the bill would need to “dominate basically the entire working session,” according to Galaxy’s head of research, Alex Thorn. Any delays or competing priorities could prove fatal to the legislation.
Complicating matters further, the Securities and Exchange Commission unexpectedly cancelled an open meeting scheduled for Friday—the one where it planned to unveil “clear rules of the road” for crypto markets. The SEC cited “an unforeseen scheduling issue,” but the cancellation created friction within regulatory circles. The White House reportedly expressed concern that the SEC moving unilaterally on crypto rules could alienate Democrats and derail delicate negotiations already underway to secure CLARITY’s passage.
The stakes are high: if CLARITY fails, the SEC and CFTC have signaled they plan to issue their own regulatory frameworks for crypto markets, potentially creating piecemeal rules rather than comprehensive legislation. This week, SEC Chair Paul Atkins, President Donald Trump, and executives from Coinbase, a16z, Ripple, Chainlink, NYSE, and Nasdaq are scheduled to meet at the White House to discuss pathways forward for crypto regulation and explore options to salvage the bill.
Security Threats Escalate for Wallet Users
While regulators debate the framework for crypto, users are facing immediate threats to their assets and privacy. Trezor disclosed that a breach via its shipping provider ShipMonk compromised personal data for approximately 14,000 wallet users who received hardware wallets between May 10 and August 8 through US, UK, Swedish, Colombian, Brazilian, Italian, and Portuguese channels. The leaked personal information puts those users at elevated risk for phishing attacks.
SafePal reported a separate breach affecting nearly 40,000 customers, with unauthorized access to order information including names, addresses, and purchasing data. The company has identified and dismantled over 30 fraudulent websites and phishing links spawned by the incident. Together, these breaches highlight the expanding attack surface as cryptocurrency adoption widens.
The security threats arrive against a backdrop of other concerns: a $116 million theft from Coldcard hardware wallets has prompted Bitcoin developers and security teams to call for greater access to frontier artificial intelligence models to identify vulnerabilities before attackers can exploit them.
For crypto investors, regulatory clarity and security assurance are both essential for mainstream adoption.
Source: Galaxy Digital, via Cointelegraph. Not financial advice.