New York Attorney General Letitia James, joined by 17 bipartisan attorneys general, sent a letter on September 14 to Senate Banking, Housing, and Urban Affairs Committee Chairman Tim Scott and Ranking Member Elizabeth Warren, urging them to vote against the crypto market structure bill known as the CLARITY Act. The letter was signed by 18 attorneys general from 17 states and Washington, D.C. It argued that the bill could strip states of their authority on the front lines of fraud enforcement, and criticized in particular a loophole in the "qualified transactions" provision of the Securities Act of 1933 that would let the US Securities and Exchange Commission unilaterally override state registration regimes, calling it an "unprecedented grant of authority." James said the current wording "emboldens fraudsters." Crypto-related losses in 2025 totaled 11.4 billion dollars according to FBI figures, and state authorities have brought more than 330 cases since 2017. The Senate is scheduled to hold a cloture vote on the motion to proceed at 2:15 p.m. on September 15, with 60 votes needed to pass. Republicans released a 635-page amendment early on the 14th, offering concessions such as giving state attorneys general enforcement power over conflict-of-interest rules for public officials, but the attorneys general said it was insufficient. If the bill is rejected, passage within the year would be all but impossible.
Grayscale Files 3-for-1 Forward Split for Zcash ETF ZCSH
Grayscale has filed with the U.S. Securities and Exchange Commission for a 3-for-1 forward share split of its Zcash ETF, ticker ZCSH, making shares 300% more accessible to retail investors. Shareholders of record at the close of trading on Sept. 28 will receive two extra shares for every one they already hold, with the new shares paid out after market close on Sept. 29 and split-adjusted trading beginning before the market opens on Sept. 30 under the same ticker ZCSH and the same CUSIP number. Grayscale said the forward split is expected to decrease the price per share of the fund with a proportionate increase in shares outstanding, leaving the net asset value per share at roughly one-third of its pre-split level. The move follows a month of heavy inflows: ZCSH has pulled in more than $233 million since it started trading on Aug. 25, including a $46.6 million day this week and a single $112 million day on Sept. 8, with net assets around $890 million as of Sept. 17. ZCSH is the world's first spot exchange-traded fund to hold Zcash's token, ZEC, directly, born from a conversion of Grayscale's older Zcash Trust, which already held roughly $313 million in ZEC when it began trading on NYSE Arca, and it follows ZEC's more than 2,800% rise over the last year.
Bitcoin Rallies to Two-Week High Above $80,000 as Altcoins Outperform
Bitcoin rallied to a two-week high on Friday, climbing back above the psychologically important $80,000 level, with the broader crypto market joining the advance. According to Bitget Wallet research analyst Lacie Zhang, US spot ETF inflows and short covering helped push it through the psychologically important $80,000 level. The surge came despite a Fed rate hike earlier in the week and the failure of the Clarity Act, legislation that would have created a federal framework for the broader digital asset industry; after the measure failed to advance in the Senate, the Securities and Exchange Commission stepped in on Thursday with a conditional exemption allowing the trading of certain tokenized stocks on blockchains for the next five years. While bitcoin led the move, ether, binance and solana have outperformed over the past month, gaining 35%, 25% and 41% respectively, and rotation into alternative tokens and tokenized versions of Nvidia, Tesla and the S&P 500 helped lift the total crypto market capitalization to $2.66 trillion, according to CoinMarketCap. Fundstrat's Sean Farrell said crypto has absorbed a fairly aggressive hawkish repricing without much damage, while Compass Point's Ed Engel last week upgraded Coinbase to Neutral from Sell, citing that BTC is recovering from a cyclical bottom.
ECB President Personally Intervened to Block Binance's MiCA Approval, WSJ Reports
European Central Bank President Christine Lagarde personally intervened to stop crypto exchange Binance from obtaining authorization within the European Union, the Wall Street Journal reported on September 18. Binance had applied for authorization under the EU's Markets in Crypto-Assets regulation, MiCA, through the Hellenic Capital Market Commission, but withdrew its application on June 24 and indicated it would seek approval in another EU member state. MiCA's transition period ended on July 1, and unauthorized operators are in principle required to stop accepting or soliciting new customers, yet as of September 4 Binance remained unauthorized while continuing to serve some EU customers, citing the reverse solicitation exemption. According to the WSJ report, Greek authorities told Binance by late May that the application process was complete, and the company, expecting approval, was preparing an announcement, but officials later said Lagarde intended to hold off on a decision until a reform transferring authority over crypto firm licensing to the European Securities and Markets Authority is realized. Approval in Greece was seen as important because it would open access to the entire EU market through MiCA Article 65's EU passporting regime, and although licensing decisions rest with each member state's competent authority and the ECB has no formal power, Lagarde was reportedly concerned that Binance's EU expansion would spread the use of dollar-denominated stablecoins and hinder adoption of the digital euro and euro-denominated payment methods.
