US Senate hypes crypto legislative ‘agreement’ no one’s agreed to yet

Key U.S. senators say they’ve reached an ‘agreement’ on how to remove a major stumbling block preventing passage of digital asset market structure legislation; now, all they have to do is get all the major stakeholders to read and accept it.

Late last week, Politico reported that “a tentative agreement” had been reached between Senate Banking Committee members and the White House regarding the contentious ‘yield v rewards’ aspect of the committee’s digital asset market structure legislation (CLARITY Act).

Senators Thom Tillis (R-NC) and Angela Alsobrooks (D-MD) have been leading negotiations on a compromise that aims to satisfy crypto operators like Coinbase (NASDAQ: COIN), who want to offer ‘rewards’ (aka interest) to users holding stablecoins on their platforms. The bipartisan pair also hopes to please the banking sector, which wants crypto platforms to be subject to the same ‘yield’ (aka interest) prohibitions that stablecoin issuers face under the GENIUS Act.

CLARITY has been soaking in formaldehyde for over two months after Coinbase abruptly withdrew its support over the rewards issue. Alsobrooks told Politico that she and Tillis “do have an agreement in principle … And I think what it will do is to allow us to protect innovation, but also gives us the opportunity to prevent widespread deposit flight.”

Alsobrooks said the agreement would bar platforms paying rewards “on a passive [stablecoin] balance,” in keeping with her earlier proposals of permitting rewards based on an undefined range of ‘activities.’ However, the scope of these activities has yet to be clarified publicly.

And Tillis acknowledged that, while the White House is satisfied with the proposed solution, “now we have to vet it with industry, because they are a party to an ultimate deal.” Crypto representatives were scheduled to get their first look at the terms behind closed doors on Capitol Hill on Monday, with the banking sector reportedly waiting until Tuesday to study the fine print.

Banks maintain that if crypto platforms are offering stablecoin holders higher interest than they can get via bank accounts, bank customers will mass-withdraw their deposits and plow them into stablecoins. The banks say this will negatively impact their ability to offer loans, particularly in smaller communities served by smaller banks. Crypto operators say these fears are overblown and banks just don’t want to have to match the interest rates available via stablecoins on platforms.

The day before this latest agreement was announced, Crypto in America’s Eleanor Terrett tweeted that Tillis and other Banking Republicans were pressing White House crypto advisor Patrick Witt to release a White House Council of Economic Advisers study on rewards/yield and its potential impact on deposit flight, which reportedly takes crypto’s side in this argument.

Witt tweeted Friday that Tillis and Alsobrooks had done yeomen’s work “bridging the partisan divide to tackle a difficult issue. More work to be done to close out this and other outstanding issues, but this is a major milestone toward passing the CLARITY Act.”

Those ‘other outstanding issues’ are legion, including whether to enshrine legal protections for developers of decentralized finance (DeFi) platforms when bad actors use those platforms for illicit purposes.

There’s also the even thornier ‘ethics’ issue, aka Banking Dems’ desire to prohibit elected officials—including President Trump—and their families from profiting off crypto ventures over which they hold the power to loosen regulatory constraints. (Trump’s son Eric chose this week to declare that his family “started the three most successful crypto projects, probably in history.”)

A further wrinkle was injected into this process last Thursday, when Politico reported that Banking Republicans were considering adding community bank deregulatory provisions to CLARITY in exchange for House Republicans agreeing to approve the Senate’s recently passed housing bill.

The thinking here is that the community banks that oppose CLARITY over the rewards issue might reduce their resistance if offered these deregulatory perks. The provisions were part of the House’s housing bill, which passed in February, and are said to be a key priority for House Financial Services Chair French Hill (R-AR), who also took point on passing the House’s version of CLARITY last year.

Senate Banking member John Kennedy (R-LA) reportedly expressed reservations regarding the House proposal, threatening to block CLARITY’s passage if the House doesn’t agree to approve the Senate’s housing bill. So anyone celebrating an apparent CLARITY deal should acknowledge that there are miles to go before anyone here sleeps.

CFTC clarifies ‘tokens as derivatives collateral’ questions

Another CLARITY obstacle is the ‘quorum’ issue, aka President Trump’s refusal to guarantee minority party representation at key federal agencies, including the Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC), the two bodies tasked with most crypto oversight.

Neither the CFTC nor the SEC is currently filling all five seats of their respective commissions, and the CFTC is literally down to just Chairman Michael Selig. In the meantime, both agencies are using the lack of internal debate to push through sweeping changes in how they handle digital assets.

The CFTC continued that push last Friday, March 20, by issuing a list of responses to frequently asked questions on how futures commission merchants (FCM) and derivatives clearing organizations (DCO) should handle the use of digital assets as collateral in derivatives markets.

The FAQ follows the CFTC’s September 2025 proposal to allow tokenized collateral—specifically, BTC, ETH, and the USDC stablecoin issued by Circle (NASDAQ: CRCL)—and last December’s opening of a consultation on how this proposal might be implemented.

The CFTC says FCMs looking to accept tokens as margin collateral are subject to several conditions, including limiting tokens to the aforementioned trio for the first three months. FCMs must promptly alert the CFTC in writing of “any significant operation or system issue, disruption, or failure, including any cybersecurity incident” involving the use of tokens as collateral. FCMs must also submit weekly reports of the total amount of tokens held in each of their futures, foreign futures, and cleared swaps accounts.

After that initial three-month period expires, FCMs can expand their token options beyond the original trio, while the weekly reporting requirements can halt.

There are a few stricter limitations, including a ban on allowing FCMs to invest customer funds in stablecoins. FCMs also can’t deposit proprietary non-stablecoin tokens in segregated customer accounts as residual interest. Swaps dealers can’t exchange tokens as initial or variation margin for uncleared swaps entered into with a swap dealer or a financial end user.

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SEC okays Nasdaq tokenized securities trial

The SEC has largely given up crypto-related enforcement actions since Trump’s second term began, which may have contributed to last week’s abrupt resignation of its enforcement director. (Just in time for some governmental non-crypto insider trading that almost certainly won’t be investigated!) In perhaps a further sign of the agency’s unwillingness to hold crypto’s feet to the fire, the enforcement division’s X account has been deleted.

Meanwhile, the few remaining obstacles separating market participants from the brave new financial world continue to be swept aside. Last week, the SEC approved a rule change that will allow the company behind the Nasdaq exchange to ‘enable the trading of securities on the exchange in tokenized form.’

Nasdaq Stock Market LLC applied for the rule change last September, and the SEC has now given the green light for a ‘tokenization pilot program’ operated by the Depository Trust Company (DTC) that will permit trading tokenized versions of “certain equity securities and exchange traded products on the Exchange that are eligible for tokenization.”

For the duration of this pilot program, tokenized trades will be limited to securities in the Russell 1000 Index, and exchange-traded funds (ETFs) that track major indices like the S&P 500 and the Nasdaq 100. But Nasdaq will update these lists as new products become eligible for tokenization.

Those participating in the pilot will have the option of settling trades in either traditional or tokenized form, while the stocks in question will share the same order book and execution priority, provided the tokenized security “affords its shareholders the same rights and privileges as does a share of an equivalent class of the traditional security.”

Nasdaq originally suggested its tokenization trial might begin in the third quarter of 2026. The SEC filing offers no update on the timing of this launch.

But as luck would have it, the House Financial Services Committee is holding a hearing on Wednesday, March 25, titled Tokenization and the Future of Securities: Modernizing Our Capital Markets. Nasdaq VP John Zecca will be among the witnesses offering testimony, so perhaps we’ll get a more specific timeline for the launch of this pilot program.

Other witnesses include Kenneth Bentsen Jr., CEO of the Securities Industry and Financial Markets Association (SIFMA). SIFMA has lobbied against DeFi platforms being allowed to trade tokenized equities if the platforms aren’t subject to the same regulations imposed on tradfi platforms.

Also on hand will be Christian Sabella, managing director of the Depository Trust and Clearing Company (of which DTC is a part), which launched the preliminary version of its tokenization program last December. Offering moral support for the digital asset sector will be Blockchain Association CEO, Summer Mersinger.

Not appearing will be Larry Fink, CEO/chair of Wall Street giant BlackRock (NASDAQ: BLK), but Fink did offer praise for tokenization in his annual letter to shareholders. Noting that “half the world’s population carries a digital wallet on their phone,” Fink suggested that these same wallets “could also let you invest in a broad mix of companies … Tokenization could help accelerate that future by updating the plumbing of the financial system.”

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SBF still protesting innocence, parents publicly lobbying Trump for pardon

On March 31, long-suffering former customers of the defunct FTX exchange will receive the latest distribution of funds recovered from the exchange’s ashes. This latest $2.2 billion marks the fourth distribution by the FTX Recovery Trust since FTX collapsed in a heap of scandal in November 2022.

Meanwhile, FTX’s founder Sam Bankman-Fried (SBF), who’s currently serving a 25-year sentence for fraud, money laundering, and other shenanigans, is still pushing for a new trial based on what he claims is new evidence of his innocence.

In a stinging rebuke, prosecutors called SBF’s motion for a new trial “a transparent attempt to relitigate questions the jury decided, reassert factual claims the record refutes, and advance a political narrative the defendant committed to writing before his arrest.”

That political narrative includes SBF’s claims that he was, like President Trump, a victim of persecution by the Biden administration. SBF claims he was targeted after Biden learned that, in addition to SBF’s very public eight-figure campaign contributions to Democratic causes, he’d also quietly “donated tens of millions to Republicans” (using FTX customers’ money, but never mind the details).

Prosecutors are right about SBF having committed this narrative to writing, as documents exposed during his trial show he plotted to “come out as a republican” in order to better align himself with the current administration in Washington.

SBF has been angling for a pardon from President Trump for a while now, and this month has seen him tweeting (via a non-incarcerated proxy) praise for Trump having lowered gas prices while also praising Trump for attacking Iran (which has led to spiking gas prices, but whatever).

SBF has never acknowledged his guilt regarding the massive fraud he perpetrated, so perhaps his powers of self-delusion are so great that he can ignore high-profile articles quoting Trump allies in Washington calling SBF “a piece of shit,” or the fact that Trump himself has said SBF shouldn’t expect a pardon.

And this rotten apple didn’t fall far from the tree. This weekend, SBF’s parents—Joseph Bankman and Barbara Fried—went on CNN to claim that their son was (in Barbara’s words) “the victim of an out of control prosecution. And I know that Trump himself feels he was.”

Fried claimed the Biden administration’s view was that “instead of simply announcing, ‘we are not going to legalize [crypto] and, in fact, here’s how we’re going to punish it,’ they quite deliberately tried to sabotage the industry behind the scenes and prevent efforts to legalize it, license it, regulate it.”

Fried went on to say that “Sam is one of the most brilliant, talented young men of his generation and the amount of good he can do in this world if he is free to live a life of—the life he wants would be an enormous benefit to the economy, to a lot of things Trump cares about in this world, and that [Trump] ought to regard Sam as a huge asset going forward for the country.”

It’s worth remembering that SBF’s parents received $26 million worth of the funds their son stole from FTX customers in cash and property. The FTX estate dropped the charges it filed against the parents in February, without any disclosure from either side about the settlement terms that might have been reached.

Despite all the evidence, SBF’s parents continue to claim that Sammy boy didn’t steal anything from anyone; he merely “borrowed” the funds without asking for permission. Honestly, it’s unclear whether this whole gene pool should best be described as clueless, criminal, or oblivious, although a toxic swamp-water mix of all three seems possible.

Regardless, Bankman and Fried are set to be portrayed by comedian Paul Reiser (Mad About You) and Robin Weigert (Deadwood), respectively, in The Altruists, the upcoming Netflix limited series on “the rise and fall of crypto exchange FTX and its disgraced founder.” SBF will be played by House of Guiness actor Anthony Boyle, possibly because Peter Lorre is dead.

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