US law enforcement advocacy groups are asking the White House to revise provisions in the Senate’s proposed Digital Asset Market Clarity (CLARITY) Act, specifically targeting language that would affect how “developer” guidance is handled under the bill’s Blockchain Regulatory Certainty Act (BRCA) component. The push comes as Congress heads toward a month-long recess, tightening the timeline for any legislative movement.

According to a Tuesday report by Politico, the National Association of Assistant US Attorneys and the National District Attorneys Association sent a letter to the White House urging changes to BRCA provisions related to developers. The groups want adjustments to guidelines that, as described in the reporting, would not require developers to “create, expand, or modify criminal liability under Federal law.”

Key takeaways

• Law enforcement groups have proposed edits to BRCA language in the CLARITY Act, with a focus on how developer-related guidance intersects with criminal liability.
• White House crypto adviser Patrick Witt said the proposed language is far from the Trump administration’s position and suggested the effort was not the product of “productive negotiations.”
• Senator Catherine Cortez Masto is reported to be pressing the White House to address BRCA provisions before any Senate vote.
• Senate Majority Leader John Thune had not scheduled a CLARITY vote before the chamber’s August recess as of Wednesday, narrowing the odds of final passage soon.

Law enforcement groups press for developer-language revisions

The Politico report says the letter was sent by two US prosecutors’ organizations to the White House, requesting modifications to BRCA provisions inside the CLARITY Act. The specific change outlined in the reporting centers on language that would constrain how guidelines regarding developers might affect federal criminal liability.

While the letter’s request is framed around developer-related provisions, the underlying implication is broader: how Congress chooses to draw lines between regulatory guidance and criminal exposure for participants in the digital asset ecosystem. For developers and related technical contributors, the difference between “regulatory guidance” and “criminal liability” is not merely academic—it can influence how legal teams structure compliance programs and how risk is assessed for future product changes.

The timing also matters. Politico reported the proposals with only days left before the Senate moves toward a state-work period and a month-long recess, a window that tends to limit complex floor negotiations on contested bills.

White House response raises questions on negotiation dynamics

After coverage of the proposed changes surfaced, White House crypto adviser Patrick Witt commented on the matter via social media. As reported, Witt said the provisions were “not even close” to the Trump administration’s position and suggested the changes were not the result of “productive negotiations.”

That response signals the White House may view the law enforcement groups’ requests as misaligned with the administration’s drafting approach—or as an attempt to shift the bill without reaching a common negotiating position first.

Separately, Politico reported that Senator Catherine Cortez Masto has been pushing the White House to address BRCA provisions before any potential vote. If her position reflects broader Democratic concerns, the White House’s willingness to adjust BRCA language could determine whether CLARITY can clear remaining hurdles.

Ethics fight and legislative schedule complicate passage

Beyond the developer-language dispute, the CLARITY Act has faced pushback from many Democrats tied to ethics rules in the bill, including rules connected to US President Donald Trump’s crypto investments. The report cited that Trump’s investments netted him $1.4 billion in 2025.

As of Wednesday, Senate Majority Leader John Thune had not scheduled a vote before the Senate breaks for state work periods. According to the schedule cited in the reporting, state work periods are expected to run from Aug. 7 to Sept. 14, leaving a short stretch for any procedural steps that often determine whether major legislation can reach the floor.

One procedural reality highlighted by political observers is that even if CLARITY were ready to be taken up immediately, finishing the process before the recess could be difficult. Anne Kelley, a partner at Mercury Strategies, wrote on X that completing the required steps—cloture, an amendment process, a second cloture, and up to 30 hours of debate—would be extremely challenging without unanimous consent to waive process, which she said is rare on contested bills.

For investors and market participants, that procedural friction can matter as much as the policy itself. When deadlines compress and ethics and developer-language debates remain unresolved, the bill’s direction can become harder to predict, and timelines for regulatory clarity may slip—regardless of how markets initially react to policy headlines.

Why BRCA’s regulator-shift plan remains central

One of the major goals of the CLARITY Act, as described in the reporting, is to change the regulatory purview over digital assets away from the US Securities and Exchange Commission (SEC) and toward the Commodity Futures Trading Commission (CFTC). The CFTC is described as having fewer enforcement and oversight tools and resources compared with the SEC, while both agencies are reported to be understaffed at the leadership level—specifically noting only one CFTC chair and three SEC commissioners.

That regulator-shift is one of the core reasons CLARITY is likely to remain controversial. Different agency mandates can translate into different approaches to enforcement priorities, compliance expectations, and the practical meaning of “market structure” rules for tokens and exchanges. As a result, debates over “developer” provisions and ethics rules are not separate from the regulatory center of gravity—they interact with how policymakers think the bill should function and who should have authority.

It also raises an immediate question for readers: if BRCA language—particularly around developer-related liability constraints—is being negotiated through law enforcement input, what does that mean for the broader regulatory architecture lawmakers are trying to establish? For developers and firms building on-chain infrastructure, the answer could shape both legal exposure and how they interpret future compliance requirements as CLARITY moves (or stalls).

With the Senate calendar narrowing and political disagreements persisting, the next developments to watch are whether the White House signals openness to BRCA edits and whether Senate leadership can align procedural timing with remaining ethics and policy disputes. Until then, CLARITY’s fate may hinge less on consensus about the end goal and more on whether negotiators can reconcile competing views fast enough to move the bill before recess complicates the process again.

Crypto markets are moving into what ARK Invest analyst Lorenzo Valente describes as the industry’s “biggest consolidation phase yet,” driven by investor selectivity and a shift in where application revenues flow. In an X post on Wednesday, Valente argued that only a small set of protocols and platforms with clear product-market fit are capturing a growing share of demand—while weaker projects face closures or forced restructuring.

Valente pointed to concentration in crypto application revenue as a key signal. He cited Hyperliquid and Pump.fun as together accounting for about 67% of total crypto application revenue, and said that adding Ethena brings the top three’s combined share to nearly 80%, describing this as record-high concentration.

Key takeaways

• Revenue concentration is rising: Valente estimates Hyperliquid and Pump.fun make up ~67% of crypto application revenue, with the top three nearing ~80% when Ethena is included.
• Capital is getting more selective: Valente says it’s increasingly harder for exchanges and projects without strong product-market fit to attract funding.
• Industry shakeout is likely to intensify: He expects more mergers and acquisitions, shutdowns, and restructuring, including Chapter 11 filings.
• Exchange closures are already reinforcing the theme: Recent operational wind-down plans from multiple venues align with consolidation pressures.

Why investors are picking winners

Valente’s core argument is that investor behavior is changing alongside market maturity. As capital becomes more discerning, projects that fail to demonstrate sustained usage or a defensible niche are finding it increasingly difficult to secure financing or maintain growth. In his view, this accelerates attrition: weaker products either shut down or get absorbed, leaving a smaller set of dominant protocols behind.

While consolidation is not a new pattern in crypto, Valente framed the current period as unusually pronounced—especially when measured by application revenue share. By emphasizing top platforms’ increasing dominance, he suggested that the sector is not merely pruning inefficient competitors, but also concentrating economic returns into fewer hands.

Revenue concentration and the “record-high” claim

To make the case, Valente highlighted specific platforms and their estimated contribution to crypto application revenue. According to his post, Hyperliquid and Pump.fun account for roughly 67% of total crypto application revenue. When Ethena is added, the top three approach nearly 80% combined.

The practical implication for users and builders is straightforward: if revenue is increasingly concentrated, liquidity, incentives, partnerships, and developer attention may also cluster around the same dominant venues and protocols. That can create a reinforcing cycle—success brings more of the ecosystem’s resources—making it harder for new entrants to gain traction.

Valente also described the consolidation he expects ahead as “extremely bullish” for crypto, implying that a cleaner market structure could improve resilience and investor confidence, even if the transition is disruptive for teams that don’t survive the competitive narrowing.

Source: Lorenzo Valente

Exchange wind-downs add pressure from the infrastructure layer

Valente’s consolidation thesis comes as several exchanges have recently announced plans to wind down operations or end services, underscoring the broader challenge of sustaining activity in an increasingly competitive environment.

Last week, BitMEX said it would shut down its exchange in September following a strategic review by owner HDR Global Trading. The exchange cited insufficient trading interest and noted that it had accelerated delisting of trading pairs and derivative contracts ahead of the closure. Earlier coverage details the shutdown decision and the delisting rationale: BitMEX shut down its exchange.

Days later, BitMart announced it would end trading services on Aug. 26 and then wind down completely in January 2027. The exchange attributed the decision to an evaluation of operating conditions, the market environment, and its future strategic direction. This plan is described in earlier reporting: BitMart wind-down timeline.

Together, these announcements illustrate consolidation occurring not only through market share at the application level, but also at the venue level—where competitive pressures can force even established names to reduce offerings or exit entirely.

Mergers and acquisitions show consolidation can be strategic

Alongside closures, acquisitions are also contributing to industry consolidation. Valente’s expectations for more mergers and acquisitions are consistent with how some players are expanding rather than withdrawing.

Earlier this month, Bybit launched a locally operated exchange in Indonesia after acquiring a majority stake in digital asset firm NOBI. The move expands Bybit’s footprint in one of Asia’s largest crypto markets, illustrating a different pathway for consolidation: larger operators absorbing or partnering with local entities to gain access and scale.

Related coverage: Bybit launches in Indonesia after NOBI acquisition

What to watch next

As consolidation pressures build, the next signal to monitor is whether revenue concentration keeps widening toward a small set of dominant applications while more exchanges restructure or exit. Valente expects that pattern to accelerate—so investors, traders, and builders should pay close attention to which platforms keep attracting usage as the industry prunes weaker competitors.

A federal judge has rejected the CFTC’s request to stop Wisconsin from enforcing state gambling laws against federally regulated prediction market platforms.

Wisconsin court rejects CFTC injunction

Judge William Griesbach of the U.S. District Court for the Eastern District of Wisconsin denied the Commodity Futures Trading Commission’s attempt to block Wisconsin from applying its gambling laws to prediction market operators.

The CFTC filed the federal case in April after Wisconsin sued Kalshi, Polymarket, Crypto.com, Robinhood, and Coinbase. Wisconsin alleges that sports event contracts offered through these platforms amount to unlicensed sports betting.

Griesbach found that the CFTC had not shown that it was likely to succeed on the merits, face irreparable harm, or benefit from the balance of equities required for a preliminary injunction.

The court also rejected requests from Kalshi and Crypto.com to intervene and seek preliminary relief in the federal dispute.

The CFTC argued that sports event contracts qualify as swaps under the Commodity Exchange Act and therefore fall under its exclusive federal authority. However, Griesbach concluded that the agency had not shown that sports contracts meet the law’s definition of swaps.

That finding alone was enough to deny the injunction, according to the court’s reasoning.

State gambling laws may cover sports contracts

Griesbach also rejected the CFTC’s argument that the Commodity Exchange Act prevents Wisconsin from applying its gambling statutes to CFTC-regulated platforms.

“Wisconsin’s gambling statutes do not conflict with federal commodities regulations and are not preempted by them,” the judge wrote.

The decision suggests that federal registration does not automatically shield a platform from state gambling enforcement when its contracts are tied to sporting outcomes.

Wisconsin Attorney General Josh Kaul has described these contracts as sports bets presented as financial products.

“Thinly disguising unlawful conduct doesn’t make it lawful,” Kaul said when the state announced its lawsuits in April. “These companies’ alleged facilitation of sports betting in Wisconsin should be shut down.”

Legal analyst Daniel Wallach said the five state cases are likely to return to Wisconsin courts because the federal statute does not completely preempt state law. State judges could then consider injunctions preventing the platforms from offering sports contracts in Wisconsin.

CFTC faces pressure from 44 states

The ruling adds to a wider challenge to the CFTC’s attempt to establish national control over prediction markets.

Attorneys general from 44 states have urged the regulator to withdraw and rewrite proposed amendments to Rule 40.11. Their letter argues that the framework exceeds the CFTC’s authority under the Commodity Exchange Act and intrudes into gambling oversight traditionally handled by states.

Ohio Attorney General Andy Wilson led the coalition, which submitted its objections as the public comment period closed. The states argued that Congress had not clearly authorized the CFTC to assume control over sports betting markets.

“States have long regulated gambling—including sports bets. The federal government has not,” the letter stated, according to the filing covered by crypto.news.

The dispute matters for US users because platform access may increasingly depend on where they live. If state laws apply alongside federal commodities rules, Kalshi, Polymarket, and similar operators could face different licensing requirements or restrictions across the country.

Conflicting rulings leave prediction markets uncertain

Wisconsin’s decision contrasts with a ruling issued in Minnesota earlier this week.

U.S. District Judge Katherine Menendez temporarily blocked Minnesota’s new prediction market ban after finding that the CFTC, Kalshi, and Polymarket were likely to succeed in their federal preemption challenge. The injunction allows the platforms to continue operating in Minnesota while the case proceeds, according to the Associated Press.

The different outcomes leave the industry without a consistent national standard. Courts in Wisconsin and New York have favored state authority, while Minnesota’s ruling supports the CFTC’s claim that some event contracts fall under exclusive federal oversight.

A CFTC spokesperson said the agency was disappointed with the Wisconsin decision and would appeal. The next stage could determine whether Wisconsin’s lawsuits proceed in state court and whether the affected platforms must stop offering sports contracts there.