The National Sheriffs' Association has withdrawn its opposition to the CLARITY Act, which sets out market structure for crypto assets, and shifted to a neutral stance. The association disclosed this in a letter dated July 3 to Senate Banking Committee Chairman Tim Scott and Ranking Member Elizabeth Warren, explaining that discussions with the administration had deepened its understanding of the interpretation of Section 604 of the bill, resolving some of its concerns. That section exempts developers from liability for illegal user activities on decentralized platforms, which the association had initially opposed on the grounds that it could create a loophole for criminals. In the letter, association president Bob Gualtieri stressed that training and resources for state and local law enforcement are essential for investigating crypto-related crimes, and called for an amendment to Section 309, which requires the Treasury Department to study illicit finance risks in decentralized finance, to involve state and local law enforcement. While the bill enjoys bipartisan support, a Senate vote has stalled due to banking industry pushback over stablecoin yields, and supporters are pushing for a floor vote this month in hopes of passage before the November midterm elections.
SEC Unveils Trading Framework for Tokenized Stocks, S&P Acquires OpenZeppelin, DeFi Market Cap Hits $80 Billion
The U.S. Securities and Exchange Commission introduced a provisional, conditional exemption allowing certain tokenized U.S.-listed equities to trade on-chain under specified conditions, while S&P Global agreed to acquire OpenZeppelin, a firm specializing in smart contract security infrastructure. The SEC measure, set out in a "Statement on Innovation Exemptions" signed by Commissioner Mark T. Ueda, guarantees holders of equity tokens the same rights as holders of conventional shares and requires third parties to notify the issuer of the underlying stock in writing before dealing in tokenized shares. According to S&P Global, OpenZeppelin's technology has supported the transfer of more than $37 trillion in value cumulatively, including major stablecoins and tokenized funds. Following these announcements, the market capitalization of DeFi-related tokens rose about $7 billion on Friday, climbing 8.8% to $79.8 billion, while the total market capitalization of the broader crypto market rose 4% to $2.7 trillion. Hyperliquid's HYPE jumped 10.8% to an all-time high of about $90.46, giving it a market capitalization of $20.12 billion; Uniswap's UNI rose 29.1% over 24 hours to about $9.00, for a market capitalization of $5.59 billion; and Aave's AAVE gained 9.5% to about $135.28. Bitwise Chief Investment Officer Matt Hougan said the SEC is trying to put in place as much of a crypto regulatory framework as it can under its existing authority, and described tokenization as a massive tide.
CFTC Submits New Crypto Regulation Proposal to White House
The U.S. Commodity Futures Trading Commission submitted a regulatory proposal on crypto asset trading and markets to the White House for review on September 17. According to review records published by the Office of Information and Regulatory Affairs, which operates under the Office of Management and Budget, the item is under review at the "pre-rule stage" and is titled "Regulation of Crypto Asset Trading and Crypto Asset Markets." The public record does not indicate specific draft rules or which entities would be covered, and the submission does not mean a new rule has been finalized. To establish oversight rules for the crypto asset market, the CFTC and the U.S. Securities and Exchange Commission made Project Crypto a joint effort in January 2026, and in March they published interpretations and guidance on applying federal securities law to crypto assets; this submission is the CFTC's follow-on move toward rulemaking. Meanwhile, the CLARITY Act, which would set the SEC's and CFTC's supervisory scopes in law, has stalled, and the U.S. Senate on September 15 rejected a cloture motion to begin debate by a vote of 49 in favor to 50 against.
SEC Grants Five-Year Innovation Exemption for Tokenized U.S. Equities, Lifting Robinhood and Coinbase
The SEC announced a five-year conditional Innovation Exemption allowing eligible platforms to trade tokenized U.S. equities without standard exchange registration, sending shares of Robinhood up 7.6% and Coinbase up 10.5%. According to Reuters, the temporary framework lets digital asset brokerages and trading platforms support tokenized equity trading while the agency solicits public comments to shape permanent regulatory policies for on-chain securities. Tokenized equities represent traditional corporate shares as digital tokens on a blockchain, potentially enabling 24/7 trading, fractional ownership, and more efficient settlement. The move reduces compliance hurdles and waives full exchange registration requirements for qualifying participants, opening the door for platforms like Coinbase and Robinhood to launch new asset offerings and capture additional trading volume. The rally was further supported by a rebound in the broader cryptocurrency market, with Bitcoin trading up roughly 2% near $78,000. Coinbase remains down 17.7% since the start of the year and trades at $194.63 per share, 49.7% below its 52-week high of $387.27 from October 2025.