The US Senate’s schedule is becoming a key variable for the crypto industry as lawmakers prepare to enter summer recess at the end of this week, according to Bernstein, a wealth manager. Bernstein says that the odds of the Digital Asset Market Clarity Act (CLARITY) advancing are falling, raising the risk of another short-term downturn in crypto valuations—particularly for Bitcoin.

In a Monday report shared with Cointelegraph, Bernstein also warned that a missed legislative push could spark a “knee-jerk” reaction from market participants. Still, the firm points to a counterbalance: if Congress stalls, regulators may intensify efforts already underway under existing authorities, including the SEC and CFTC’s Project Crypto.

Key takeaways

• Bernstein says CLARITY momentum is weakening as the Senate approaches its summer recess, increasing the risk of additional downside for the market.
• The firm expects the crypto market to bottom and regain momentum toward late Q3 or early Q4 ahead of the mid-term period, if timing pressures persist.
• Prediction market activity on Polymarket puts CLARITY passage before the end of 2026 at 31%, down from 38% week-to-date.
• Bernstein argues that legislative delays could lead to more proactive SEC and CFTC policy releases tied to token classification and DeFi rules under Project Crypto.

Recess risk and the “knee-jerk” market reaction

Bernstein’s central concern is timing. With the Senate preparing to start summer recess, the window for passing CLARITY appears to narrow. The wealth manager said that if the legislation does not advance, the market could interpret the outcome as a near-term delay in US crypto market structure reform.

In Bernstein’s view, that could trigger an immediate negative “industry knee-jerk reaction,” potentially translating into another leg down for Bitcoin and the broader crypto market. The firm’s outlook is not purely bearish, however: it also anticipates that—tactically—the market could find a bottom and begin building momentum toward late Q3 and early Q4 before the mid-terms.

What Project Crypto could do if CLARITY stalls

Bernstein’s report highlights an important asymmetry. While markets may react negatively to legislative delays, the same outcome could push regulators to move faster within their current legal frameworks.

Project Crypto is a joint initiative intended to use existing agency authority to develop a workable regulatory approach for digital assets while Congress finalizes broader legislation under CLARITY. The SEC first announced Project Crypto under Chairman Paul Atkins in July 2025, and it was later expanded into a joint staff effort between the SEC and the CFTC in September 2025. (SEC announcement: https://www.sec.gov/about/sec-launches-project-crypto; CFTC/SEC expansion referenced by Cointelegraph: https://www.cftc.gov/LawRegulation/FederalRegister/finalrules/2026-05635.html.)

According to Bernstein, the SEC and CFTC could respond to Congress’s slowdown with additional interpretive releases and clearer guidance. The firm specifically points to potential developments involving:

• Token “taxonomy” and interpretive guidance tied to how different types of tokens should be treated.
• Clearer rules related to decentralized finance (DeFi).
• Acceleration of an “innovation exemption” concept for issuing tokens that would be exempted from securities status during a finite period.

For investors and builders, the practical takeaway is that regulatory clarity might not arrive only through CLARITY. If Congress can’t deliver in the near term, markets may increasingly price regulatory outputs—such as guidance, interpretive releases, and rulemaking momentum—emanating from the SEC and CFTC.

Polymarket odds slip to 31% for passage by end-2026

Bernstein’s concern about dwindling prospects for CLARITY is echoed by market-implied probabilities. Polymarket data shows the odds of the act being signed into law before the end of 2026 at 31%, down 7% over the past week and down 9% over the past month. The market reports roughly $3.7 million has been wagered on the outcome. (Source: Polymarket.)

The drop matters because prediction markets often reflect shifting expectations around legislative scheduling and political willingness—especially when credible procedural deadlines approach. In this case, the timing implied by summer recess is a direct catalyst for priceable uncertainty.

Earlier coverage also indicates that expectations have moved in recent months: on June 26, Galaxy Digital cut its odds of CLARITY becoming law in 2026 to 50%, warning that the US Senate was running out of time to pass the market-structure bill before its August recess (as noted in Cointelegraph’s reporting: https://cointelegraph.com/news/galaxy-cuts-2026-clarity-act-odds-50).

Political and industry friction around the bill

Beyond Senate calendar risk, CLARITY is navigating political and institutional scrutiny. Cointelegraph reported that White House officials are reportedly weighing a bipartisan ethics counterproposal received on Thursday after weeks of negotiations between Republican Senator Thom Tillis and Arizona Democrat Ruben Gallego.

Per sources familiar with the matter who spoke to crypto journalist Eleanor Terrett, the proposal would allow state attorneys general to sue the Department of Justice if it fails to enforce ethics laws against federal officials. (As reported by: https://www.cryptoinamerica.com/p/president-trump-weighs-bipartisan.) The relevance for crypto stakeholders is indirect, but it underscores how broader political processes can consume attention and time that might otherwise be directed toward stalled legislation.

CLARITY’s substance has also faced resistance. The banking industry has pushed back, arguing that the draft could let crypto firms offer yields on stablecoins without meeting requirements they say apply to traditional financial institutions. Cointelegraph also flagged that the act’s stablecoin yield provisions have drawn concern from banking groups (related link referenced in the source material: https://cointelegraph.com/news/aba-banking-associations-clarity-act-yield).

As those tensions persist, the bill’s path becomes less predictable—one reason prediction market odds and institutional forecasts can move quickly as legislators approach procedural inflection points like recess.

With the Senate headed into recess, traders and long-term participants should watch two things in parallel: whether CLARITY gains any late-stage momentum before lawmakers leave, and whether the SEC and CFTC accelerate practical guidance under Project Crypto—especially around token classification and DeFi—if Congress fails to deliver the legislative clarity the market is pricing.

Romance scams remain a persistent threat in Asia, with Hong Kong police reporting a concentrated spike in cases tied to fake “crypto investment” schemes. Between July 24 and July 30, authorities logged 25 romance-linked fraud reports, totaling about $9 million in losses, according to the Hong Kong Police Force.

In one reported case, an insurance agent lost $3.3 million after being persuaded by a fabricated online boyfriend to invest through a fraudulent crypto application—an approach scammers have increasingly used to mimic legitimate trading platforms while manufacturing returns on screen.

Key takeaways

• Hong Kong recorded 25 romance-linked fraud cases in a single week (July 24–July 30), with combined losses near $9 million.
• Scam operators build long relationships via dating and messaging apps, then push victims toward a fake crypto trading app showing false profits.
• Hong Kong’s HashKey Exchange said JPMorgan Chase approved its move to open a client money account.
• Malaysia withdrew support for Malaysia Blockchain Week after controversy over an after-party tied to an influencer with adult-content history.
• Several regulatory and industry shifts across Asia—stablecoin rulemaking in South Korea and Bitget exiting Japan—signal continued policy tightening alongside operational changes.

Hong Kong’s romance scams: from chat rooms to fake trading apps

Hong Kong police say scammers often initiate contact through dating platforms or messaging apps, then spend weeks or months developing trust. Only after victims become emotionally invested do criminals introduce the idea of cryptocurrency investing.

Fraudsters then direct victims to a website designed to resemble a genuine trading application. The platform typically displays rising balances and “profits” to encourage additional deposits. The fraud usually becomes clear only when victims attempt to withdraw funds and find that transfers are blocked or accounts cannot be accessed.

Police reported that, in the case involving an insurance agent, the scam escalated to $3.3 million—demonstrating how quickly these schemes can move from initial persuasion to large-value transfers. The broader week-long total of $9 million suggests the pattern is not isolated, but part of an active criminal campaign.

Regional compliance signals: HashKey gets JPMorgan client money approval

While Hong Kong grappled with scam activity, the city also saw a separate development that touches on institutional readiness: HashKey Exchange said it received approval from JPMorgan Chase to establish a client money account, per statements from the company’s parent group.

HashKey framed the approval as a step forward in enabling client money handling within its regulated operating framework. For investors and counterparties, client money arrangements are often a practical building block for institutional confidence—especially for firms dealing with custody-like responsibilities and segregation expectations.

That said, the scam reports underscore a different reality for retail users: even where regulated exchanges expand capabilities, criminals can still exploit individual naivety through counterfeit apps and social-engineering tactics.

Malaysia Blockchain Week support pulled over OnlyFans-linked after-party backlash

Malaysia’s crypto sector faced reputational and administrative pressure after the government withdrew support for Malaysia Blockchain Week. Organizers said the decision followed controversy related to an after-party featuring an influencer previously known for adult content.

Earlier coverage noted that Malaysia Blockchain Week was linked to promotional materials circulating online, after which event organizers apologized to the Ministry of Digital and the Malaysia Digital Economy Corporation. Organizers then reportedly canceled the performance and removed references to the event from its website.

The episode highlights a recurring tension for blockchain conferences: while policy conversations often focus on regulation and technology, broader public scrutiny and political optics can still shape whether governments are willing to publicly back industry gatherings.

China: warning over Bitcoin extortion scams using publication name

In China, a state-affiliated outlet—reported as China Business Journal—warned that fraudsters were impersonating the publication to extort companies. According to the newspaper, scammers demanded Bitcoin payments while claiming they had uncovered damaging information through “undercover investigations.”

The warning described use of a Proton Mail address for contacting businesses, along with threats to publish alleged material unless companies paid in Bitcoin. This is another example of how crypto payments are increasingly used as a tool in non-crypto-specific crimes: the asset acts as the settlement mechanism for intimidation rather than part of a legitimate investment process.

The same broader period included other reported crypto-related developments, including police academy research claiming an AI system capable of detecting illegal crypto transactions with nearly 90% accuracy, and arrests tied to crypto money laundering connected to telecom fraud.

South Korea moving toward stablecoin regulation as tax debate continues

South Korea’s policy roadmap remains under construction, with a reported plan by the Financial Services Commission to draft a consolidated Digital Asset Basic Act alongside the ruling Democratic Party. The reported draft scope includes stablecoin issuance and circulation, digital asset business rules, exchange entry requirements, disclosures, internal controls, and standards for system resilience.

At the moment, South Korea’s Parliament is considering multiple separate bills related to digital assets and stablecoins. Disagreements have reportedly prevented the country from finalizing elements of the next-stage crypto legislation.

Separately, the opposition’s effort to repeal planned crypto taxes has moved to a committee. The government has said the changes would take effect on January 1, 2027, even though adjustments had been postponed on three prior occasions.

For market participants, the key practical takeaway is that stablecoin policy may be consolidated—but the timing and political hurdles remain uncertain. Traders and issuers should watch for how lawmakers reconcile competing approaches between regulation needs and tax policy, especially as monthly stablecoin flows have reportedly continued to move offshore.

Singapore and Japan: restructuring pressures and account exit timelines

Singapore-based prime brokerage FalconX has reportedly cut capacity amid a prolonged crypto market slump. Bloomberg reported that FalconX laid off about 10% of its global workforce while preparing for a longer downturn, including a strategic shift in Singapore toward crypto derivatives trading.

The report also said FalconX planned to withdraw its license application with the Monetary Authority of Singapore, while maintaining a broader Asian footprint and expanding its European business. The company’s reported headcount prior to layoffs—approximately 350 across the United States, the United Kingdom, Singapore, and Hong Kong—signals how consequential these decisions can be for regional market infrastructure.

In Japan, Bitget announced it would stop providing services to residents of the country and begin account restrictions on November 1. The exchange said it stopped accepting new registrations from Japan residents, and that any positions still open by December 31 would be forcibly closed.

For Japanese users, such forced-closure timelines are particularly important because they reduce the window for risk management actions like rebalancing, exit planning, and compliance checks with alternative services.

What to watch next

Across Asia, enforcement and policy developments are unfolding alongside industry reshaping—yet the Hong Kong romance-scam figures and other extortion warnings show that social-engineering fraud remains a live risk. Investors and users should stay alert to “too-good-to-be-true” returns shown inside unfamiliar apps, while tracking how stablecoin and exchange-related rules evolve in South Korea, Singapore, and Japan.

Standard Chartered-backed Anchorpoint Financial has pushed the public rollout of its Hong Kong dollar stablecoin HKDAP into August after the project missed its previously expected second-quarter and end-of-July timelines.

According to the local media outlet the Hong Kong Economic Journal, Standard Chartered Hong Kong and Greater China and North Asia CEO Mary Huen said an announcement related to HKDAP is expected within August, adding that work on the licensed stablecoin has continued since Anchorpoint received its issuer license from the Hong Kong Monetary Authority in April.

The latest update follows earlier local media reports that the project would be announced before the end of July. Anchorpoint, backed by Standard Chartered (Hong Kong), HKT and Animoca Brands, was among the first two companies to receive a stablecoin issuer license under Hong Kong’s Stablecoins Ordinance.

HKDAP announcement has moved into August

While the launch has taken longer than initially anticipated, Huen said development has continued in the months following regulatory approval. According to the report, Anchorpoint has been testing public blockchain infrastructure to support additional use cases beyond basic issuance, with cross-border payments forming one of the priorities.

She said businesses continue to face practical challenges in international settlements because traditional payment systems are not available around the clock and often involve higher costs. The stablecoin is intended to provide another settlement option for enterprises operating across borders.

Earlier company statements said HKDAP will be issued in phases under Hong Kong’s licensing framework. Anchorpoint has also said each token will be backed one-to-one by Hong Kong dollar reserves held in segregated accounts in line with HKMA reserve requirements for fiat-referenced stablecoins.

During technical preparations, Anchorpoint completed an Ethereum mainnet transfer test in May alongside licensed virtual asset platform OSL Group and trading platform PantherTrade. Participants in the trial said the transaction demonstrated issuance, transfer and settlement using production-ready infrastructure rather than a regulatory sandbox.

HKDAP distribution will rely on approved partners

The latest report also provides more detail on how the stablecoin will reach users after issuance.

According to Huen, Anchorpoint will continue with a business-to-business-to-consumer distribution model instead of providing HKDAP directly to retail customers. Under that structure, the issuer will appoint recognized distributors, which will then make the stablecoin available to their own corporate and institutional clients.

The intended customer base includes small and medium-sized enterprises, traders, service providers, fund companies and individual users. Cross-border settlement remains the primary application, while tokenized assets have also been identified as another intended use case.

Huen said distributor agreements will be signed after Anchorpoint formally announces the stablecoin launch.

Market reports have previously identified OSL Group and HashKey Exchange as potential early distributors because both operate licensed virtual asset trading platforms in Hong Kong. Huen did not confirm those reports, saying Anchorpoint itself will announce the distributor list when it is ready, after which participating firms will introduce their planned applications for HKDAP.

Public blockchain testing has continued

Apart from the launch schedule, the report indicates that technical work has continued behind the scenes.

According to Huen, testing on public blockchain networks has been progressing to expand how HKDAP can be used, particularly for cross-border transactions. Earlier statements from Anchorpoint said deploying the stablecoin on Ethereum would allow interoperability with existing wallets, exchanges and decentralized finance applications while remaining subject to Hong Kong’s regulatory requirements.

The Ethereum mainnet trial completed in May formed part of those preparations before commercial issuance. Participants involved in the test said the exercise validated both the project’s technical design and compliance processes under production conditions.

Anchorpoint previously said HKDAP would initially follow its B2B2C rollout before expanding to additional use cases over time.

Hong Kong continues building its regulated stablecoin market

HKDAP is one of the first stablecoins being launched under Hong Kong’s regulated issuer framework.

The Stablecoins Ordinance requires issuers of fiat-referenced stablecoins to obtain approval from the HKMA and comply with reserve, disclosure and customer asset requirements. Before the first licenses were granted, Bloomberg reported that regulators had received interest from dozens of prospective applicants but planned to issue only a limited number of approvals during the initial round.

Anchorpoint secured one of those licenses in April alongside HSBC. Standard Chartered had previously disclosed plans to issue a Hong Kong dollar-backed stablecoin through the joint venture before the regulatory approvals were finalized.

Activity around Hong Kong’s regulated stablecoin market has also expanded outside the banking sector. In May, Kraken agreed to acquire Hong Kong-based payments company Reap Technologies for $600 million. 

Reap develops stablecoin-powered infrastructure for cross-border business payments, corporate cards and settlement services, with the company describing stablecoins as a tool for reducing payment costs and removing intermediaries in international transactions.

Ripple announced strategic investments in ZILO and Licuido on Aug. 3, adding two United Kingdom based firms to its digital capital markets strategy on the XRP Ledger. 

The company said the deals will add transfer agency, token issuance, trading and collateral mobility tools to its institutional infrastructure.

Ripple did not disclose either investment amount, the ownership stakes received or financial targets for the partnerships. Both companies separately confirmed the funding. ZILO also launched an integrated digital assets and transfer agency platform on Monday, while Licuido said Ripple’s backing would help scale its infrastructure on XRPL.

Ripple investments fill two gaps in tokenized funds

ZILO supplies transfer agency and fund administration technology. Its new platform lets institutions manage conventional fund units and tokenized share classes within one operating system. The company says it can support issuance, settlement, reconciliation, payments, corporate actions and regulatory reporting without requiring a separate technology stack for digital assets.

Licuido covers another part of the process. Its platform handles token issuance, distribution and secondary trading, with tokenized fund units designed for use as collateral. Its regulatory position needs careful wording. Licuido Markets Limited is an appointed representative of Sapeno Partners LLP, which the Financial Conduct Authority authorizes and regulates.

The FCA explains that a principal firm sets an appointed representative’s permitted activities and remains responsible for that business. Licuido is therefore not presented on its website as a directly authorized FCA firm.

ZILO said its configuration tools translate fund rules, share classes and jurisdictional requirements into onchain logic. It also records legal ownership as assets move, a function that transfer agents normally perform within conventional fund systems. Licuido says its legal structure links each token to one for one fund ownership, although that claim will depend on the documents and regulatory treatment applied to each product.

RLUSD will settle the cash side of fund trades

Ripple plans to use RLUSD as the cash leg for delivery versus payment transactions. In that model, the tokenized asset and payment settle together on XRPL rather than moving through separate systems at different times. Ripple says tokenized funds could then become collateral from issuance onward.

Ripple reports that XRPL has processed more than four billion transactions since 2012, supports more than seven million active wallets and is maintained by 120 independent validators. These figures describe general ledger activity rather than institutional tokenized fund usage.

The companies have not published transaction volumes, named new clients or shown that the combined system is operating at scale. Ripple executive Nigel Khakoo called the investment sector a “substantial opportunity” over the next decade. That statement is a company forecast, not a verified measure of future adoption or savings.

Aviva and DBS show where the stack may be used

As crypto.news previously reported, Aviva Investors launched a tokenized share class of its U.S. Dollar Liquidity Fund on XRPL on July 29. The move brought a partnership announced in February into production. Ripple said ZILO and Licuido are among the partners supporting issuance, distribution, custody and further uses for Aviva’s tokenized fund structures.

The broader model also resembles Ripple’s work with DBS and Franklin Templeton. In related coverage, crypto.news reported that DBS listed Franklin Templeton’s sgBENJI money market fund token beside RLUSD and planned to explore lending and repurchase transactions using tokenized units as collateral.

Those projects give Ripple existing institutional settings in which ZILO’s records and Licuido’s market tools could be tested. However, Ripple has not confirmed that the two companies will support every Aviva, Franklin Templeton or DBS product.

What happens next for Ripple’s capital markets push

The next steps depend on technical integrations and client launches. ZILO said it is providing Ripple with a digital transfer agency solution, but neither company published a deployment date. Licuido also said it would expand its collateral marketplace on XRPL without giving a launch schedule or naming participating asset managers.

Future disclosures will need to show which funds use the combined stack, what regulated activities Licuido performs under its principal firm, and whether RLUSD gains measurable settlement volume. Until then, the investments expand Ripple’s available infrastructure, but they do not establish adoption, revenue or liquidity outcomes.