What you’ll read: Washington’s usual August lull gave way to a flurry of crypto policy activity. Plus, former Signature Bank Chairman Scott Shay bets tokenized bank deposits can compete with stablecoins, Dragonfly’s Rob Hadick joins the podcast, and the week’s top stories.
Washington’s usual August lull disappeared this week.
The SEC unveiled its first crypto rulemaking proposal on Tuesday, President Donald Trump hosted industry executives at the White House on Wednesday, and the CFTC convened the inaugural meeting of its Innovation Advisory Committee on Thursday.
President Trump had a clear message for the crypto execs invited to the oval office: Pass the Clarity Act.
Industry leaders left Wednesday’s White House meeting with renewed optimism about the Clarity Act’s prospects, convinced that the Trump administration was fully committed to getting the bill across the finish line. In his public remarks, Trump urged Congress to pass a “fair version” of the bipartisan bill when lawmakers return next month, a reference to ethics provisions proposed by Sens. Thom Tillis (R-NC) and Ruben Gallego (D-AZ). Trump has argued that some of the provisions unfairly single him out, while the dispute over them has become the main obstacle to securing bipartisan agreement.
Ethics was also a focus behind closed doors. Ahead of the public remarks, Coinbase CEO Brian Armstrong, a16z Managing Partner Chris Dixon, Ripple CEO Brad Garlinghouse and Kraken co-CEO Arjun Sethi met privately with Commerce Secretary Howard Lutnick, according to two sources familiar with the meeting.
The discussion focused on the importance of passing the Clarity Act, including what it could mean for U.S. jobs, economic growth, and bringing crypto entrepreneurs and companies back onshore. The group also discussed the remaining hurdles, including ethics, and how the White House could help chart a path toward bipartisan agreement.
Another source with knowledge of the meeting said a concerted effort is underway to convince Trump’s closest allies who have his ear that accepting certain elements of the proposed ethics deal could ultimately be in the president’s own interest.
Getting crypto’s marquee legislation across the finish line was also a central theme at Thursday’s Innovation Advisory Committee meeting, which brought together leaders from traditional finance, crypto, prediction markets and AI.
“Passing Clarity is the surest way that we can prevent another Gary Gensler from running a rogue campaign of lawfare against the individuals and companies in this room today,” CFTC Chairman Mike Selig said, referring to the former SEC chief under whose leadership the agency brought 125 crypto-related enforcement actions.
But Selig also made clear that the commodities regulator is preparing to act if Congress fails to deliver.
“If Clarity continues to stall because of Democratic obstruction, the CFTC will utilize its existing authorities to begin establishing a regime for crypto asset markets,” he said, adding that he has already directed agency staff to begin exploring such rules.
Meanwhile, the SEC formally proposed Regulation Crypto Assets, a new framework for crypto fundraising in the U.S. The proposal would allow certain offerings of up to $5 million over four years or $75 million annually without full SEC registration, create a conditional safe harbor for crypto assets once an issuer’s essential managerial efforts have ended, and preempt certain state securities registration requirements.
The way the proposal was approved was also notable. The Commission voted through a “seriatim” process, meaning commissioners voted individually outside a public meeting, according to an SEC spokesperson. The SEC had been scheduled to consider Regulation Crypto Assets at an open meeting last Friday, but fueled intrigue when it abruptly canceled the meeting, citing an “unforeseen scheduling issue.”
Crypto In America reported earlier this week that pressure from both the White House and Wall Street groups like SIFMA contributed to the cancellation. The White House was concerned that Regulation Crypto Assets and a separate innovation exemption for tokenization could complicate negotiations over the Clarity Act. It may also have been responding to legal concerns raised by Wall Street groups, which argued that changes of that scale should proceed through formal rulemaking rather than exemptions or no-action relief.
Semafor later reported that a “White House mix-up” also contributed to the cancellation, with officials confused about whether the SEC intended to advance Regulation Crypto Assets or the more controversial innovation exemption.
Can Banks Compete With Stablecoins? N3XT Thinks So
Former Signature Bank Chairman Scott Shay is taking another swing at changing how businesses move money, and he thinks his latest venture could ultimately be bigger than Signet, the blockchain-based payments network he helped pioneer at Signature.
N3XT, the Wyoming special purpose depository institution Shay co-founded after Signature was shut down in 2023, announced this week that it is expanding its N3XT Digital Dollar, or NDD, beyond the bank’s own customers.
N3XT describes NDD as a digitized U.S. dollar bank deposit that can move 24/7 using public blockchains. Unlike tokenized deposits that remain within a bank’s network, NDD can be sent to approved outside wallets, including those belonging to businesses that do not bank with N3XT.
“We have created a new category in not just crypto but finance writ large — a digitized actual USD that travels at the speed of crypto anywhere and anytime,” Shay told Crypto In America. “No pegs, no bridges, no interoperability — just money moving between two parties safely and securely. That’s what banking was supposed to do. We made it happen.”
There is an important distinction for outside holders. N3XT says non-customers holding NDD do not have a direct deposit claim against the bank or a customer relationship with N3XT. As a special purpose depository institution, N3XT is not FDIC insured and is prohibited from lending against customer deposits. Instead, NDD is fully backed one-to-one by cash and short-term U.S. Treasuries. The rights of non-customer holders will be governed by terms that have not yet been published.
Signet allowed commercial customers to move dollars instantly, 24/7, and ultimately processed hundreds of billions of dollars, but it remained a closed network. Shay is betting that allowing NDD to move beyond N3XT’s customers will make this model significantly more impactful.
The timing is also notable. As banks warn that stablecoins could pull deposits out of traditional financial institutions and lobby for changes to the Clarity Act, N3XT is testing whether banks can compete by adopting the same technology that helped make stablecoins successful.
Inside Crypto’s Next Venture Cycle
This week on the podcast, we sat down with Dragonfly general partner Rob Hadick to discuss the state of crypto venture investing.
Hadick joined Dragonfly the same week FTX collapsed. Today, the firm has closed a $650 million fourth fund, even as AI draws capital and founders away from crypto and deal activity falls to its lowest level since 2021.
We also discussed why founders are returning to the U.S., whether regulatory action can sustain innovation if the Clarity Act fails and why Dragonfly has invested in Polymarket four times. Hadick believes prediction markets are only in the “third inning,” with corporate hedging and other institutional uses poised to drive the next phase of growth.
Catch the full episode on all platforms here.
Weekly Recap
ICYMI: Here are some of the biggest stories that made headlines this week.
Bitcoin climbed to $79,400, its highest level since May, as the Treasury’s bond-buyback plan continued to fuel risk appetite.
OCC Comptroller Jonathan Gould said he expects to finalize the agency’s GENIUS Act rule by November, with changes based on feedback from the crypto industry.
The U.S. national debt surpassed $40 trillion for the first time.
Fed minutes showed several officials favored a rate hike in July, while many said further tightening may be needed if inflation does not decline.
A Reuters/Ipsos poll found 63% of Americans believe it was inappropriate for Trump and his family to profit from crypto while he is in office.
Citi launched its Custody+ platform and plans to offer digital-asset custody later this year, starting with bitcoin.
Nasdaq plans to launch overnight trading from 9 p.m. to 4 a.m. ET on Dec. 6, subject to regulatory approval.
Kalshi filed with the CFTC to offer perpetual futures tied to equity indexes, allowing traders to take leveraged long or short positions without owning the underlying stocks.
TRON founder Justin Sun said a California federal judge rejected World Liberty Financial’s effort to force his individual claims into private arbitration, keeping them in open court.
The CFTC resolved its cases against former FTX and Alameda executives Caroline Ellison and Gary Wang, imposing five-year trading bans on both dating back to December 2022.
Standard Chartered and HSBC completed the first live cross-border transaction using tokenized deposits on SWIFT’s blockchain-based ledger.
Injective said its affiliate, Injective Institutional Services, is now registered with the SEC as a transfer agent.
Stablecoin payments platform KAST launched a new rewards product offering users up to 12% on spendable USD balances, with the introductory program capped at $100 million.
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The timing here is the tell: while the SEC's Regulation Crypto Assets was getting shelved over the tokenization-exemption fight you describe, Coinbase just launched tokenized Apple and Nvidia shares from an Abu Dhabi SPV under Reg S — closed to every US buyer. That's not a coincidence, it's the workaround: the domestic rulemaking stalled, so the actual tokenization product launched offshore instead, built by the same firm lobbying for Clarity. Selig's "the CFTC will act if Congress doesn't" warning reads different once you see a company already routing around both agencies.
The "seriatim" vote you flagged — commissioners approving Reg Crypto Assets individually, skipping a public meeting — is the same instinct behind last September's generic listing standards for crypto ETPs: the SEC building shortcuts so products don't need their own vote. That standard is about to get tested live — Grayscale's Zcash ETF lists Tuesday, but the six-months-of-regulated-futures requirement it needs (per Coinbase Derivatives' own CFTC filing) doesn't actually clear until September 2. If a live product jumps the gun eight days ahead of its own rule, that seems like exactly the kind of process shortcut worth a follow-up.