Former U.S. Defense Secretary Mark Esper has urged the Senate to pass the CLARITY Act before its Sept. 15 procedural vote, arguing that delayed crypto rules could weaken U.S. financial and national security.

The Financial Times published Esper’s policy argument on Aug. 7, with the former defense secretary describing the Digital Asset Market Clarity Act as “not merely a financial services bill” but also a “national security bill.”

Esper, who led the Pentagon from 2019 to 2020, said U.S. power relies partly on the dollar and the payment networks that carry it around the world. Clear rules for digital assets, he argued, would help preserve Washington’s view into financial activity while supporting sanctions enforcement.

When crypto companies and transactions move through offshore venues with weaker controls, Esper said U.S. agencies lose some of their ability to follow funds and act against illicit networks. He also warned that delays in Washington give China more time to build payment systems outside U.S. influence.

Esper currently serves on Coinbase’s Global Advisory Council, which advises the exchange’s leadership on policy and strategic matters. Coinbase lists him among several former government and national security officials appointed to the council.

Coinbase Chief Policy Officer Faryar Shirzad shared Esper’s comments on X, quoting his call for lawmakers to treat the legislation with urgency.

CLARITY Act faces a 60-vote test on Sept. 15

Senate Majority Leader John Thune filed cloture on the motion to proceed to H.R. 3633 before lawmakers left Washington for their August recess. The resulting vote is scheduled for Sept. 15, after senators return to regular business.

Cloture would require support from 60 senators. Republicans cannot reach the threshold without Democratic votes, leaving the bill dependent on a cross-party agreement that has remained difficult during negotiations.

A successful vote would not send the legislation to the president. It would allow the Senate to start formally considering the measure, after which lawmakers could debate the proposal and offer amendments before a final passage vote.

The House approved H.R. 3633 by 294–134 in July 2025. The Senate Banking Committee later advanced its market-structure text by a 15–9 vote, with two Democrats joining Republicans.

Any Senate text that differs from the House-approved bill would need additional action before reaching the White House. Congress could send the revised version back to the House or form a conference committee to settle differences between the two chambers.

The proposal would divide responsibility for digital assets between the Commodity Futures Trading Commission and the Securities and Exchange Commission. Qualifying digital commodities would generally come under the CFTC, while the SEC would keep authority over tokens and transactions treated as securities.

For U.S. investors, the division could determine which agency supervises trading platforms, brokers, and other intermediaries. It could also create federal registration standards for parts of the spot crypto market that do not currently face routine CFTC supervision.

Esper links crypto oversight to sanctions enforcement

Esper’s security case rests partly on the role of the U.S. dollar in global trade and finance. American authorities can monitor or restrict transactions that pass through banks and payment networks subject to U.S. law, giving Washington tools to enforce sanctions and investigate illicit finance.

Digital asset activity routed through lightly regulated foreign platforms can make that work harder, according to Esper. He cited threats from sanctioned networks and North Korean cyber groups while arguing that a U.S.-regulated market would give law enforcement more reliable access to transaction and customer records.

Treasury records have identified the Lazarus Group as a North Korean state-sponsored cyber organization. U.S. authorities have linked the group to major digital asset thefts, including the roughly $625 million attack on the Ronin network in 2022.

Esper also pointed to China’s work on payment infrastructure that does not depend on U.S.-controlled financial channels. In his assessment, allowing other countries to set digital asset standards first could reduce Washington’s influence over future payment networks.

Parts of the Senate proposal address the same concerns through specific enforcement powers. A merged draft released in July contains an illicit-finance title covering foreign adversary activity, law enforcement training and international cooperation.

Section 10303 would expand the Treasury Department’s special-measures authority under Section 311 of the USA PATRIOT Act. Under the proposal, Treasury could prohibit or place conditions on certain digital asset transfers linked to foreign jurisdictions, institutions or transaction classes found to present a primary money-laundering concern.

Senate Banking Committee Chair Tim Scott has also argued that the legislation would make it harder for criminals and foreign adversaries to misuse the U.S. financial system. Esper’s argument places the same provisions within a defense and foreign-policy framework.

Senate disputes continue despite security argument

National security support does not resolve the disagreements holding up the bill. Lawmakers and industry groups remain divided over stablecoin rewards, decentralized finance rules, and ethics restrictions for public officials with digital asset interests.

The current draft distinguishes between passive returns on idle stablecoin balances and rewards generated through activities such as lending or supplying liquidity. Banks have pressed lawmakers to prevent exchanges and stablecoin businesses from offering interest-like products without the capital, insurance, and oversight rules applied to bank deposits.

In July, U.S. banking organizations asked Senate leaders to revise Section 404, warning that unclear restrictions could move deposits away from community and regional banks. Circle shares fell more than 2% in pre-market trading as the bank lobbying dispute added to uncertainty surrounding the legislation.

Crypto companies have argued that overly strict limits could push customers toward less regulated services. Coinbase, which earns revenue from its relationship with Circle and USDC-based customer rewards, has sought changes to the proposed restrictions.

Political ethics provisions have created a separate obstacle. Democratic lawmakers have sought tighter rules covering digital assets issued or held by senior government officials, while disagreements remain over whether officials should have to divest existing holdings.

Decentralized finance has also complicated negotiations because lawmakers have not agreed on how to classify protocols or determine when a blockchain network is sufficiently decentralized. The classification can affect whether a token falls under SEC securities rules or the CFTC’s proposed digital commodity framework.

Prediction-market traders have responded to the delays by lowering their expectations for passage. An August analysis found that passage odds had fallen to 10% after reaching 82% in February, with unresolved policy disputes and the limited Senate calendar weighing on the contract.

CFTC prepares an alternative regulatory path

While Congress considers the bill, CFTC Chair Michael Selig has said his agency can continue developing digital asset proposals within its existing authority.

“Crypto will get market structure regardless of bill,” Selig said in remarks reported on Aug. 20.

The CFTC already oversees crypto derivatives, including regulated futures and options. It can also pursue fraud and manipulation in spot commodity transactions, but it lacks routine supervisory power over spot crypto exchanges comparable to its oversight of registered derivatives markets.

Any regulations adopted without new legislation would have to remain within the Commodity Exchange Act. The agency could address derivatives venues, intermediaries, and disclosure requirements, although Congress would still need to grant the full spot-market powers contemplated by the CLARITY Act.

As previously reported by crypto.news, Selig did not identify which proposals were ready, when the CFTC could release them, or how much of the planned framework could proceed under current law.

President Donald Trump called for a “fair version” of the CLARITY Act during an Aug. 19 White House meeting attended by representatives from Coinbase, Ripple, Gemini, Kraken, Anchorage Digital, Chainlink Labs, Grayscale and OKX.

The CFTC’s Innovation Advisory Committee met the following day to discuss digital assets, artificial intelligence and prediction markets. Its crypto session covered customer protection, market integrity and ways the commission could use its present authority, but the advisory body cannot adopt binding regulations or expand the agency’s jurisdiction.

Circle, the issuer behind the USDC stablecoin, is set to become a sponsor of Chelsea Football Club, with its USDC branding appearing on player jerseys for the 2026/2027 season. The move arrives just months after the UK’s financial regulator warned Premier League clubs about sponsorship arrangements involving “unauthorized” financial firms, including some crypto-related businesses.

In a press release on Friday, Circle said it will bring the USDC name to the “global game” through a partnership with the London club. The announcement follows a period of heightened scrutiny in the UK over how digital asset companies market financial products to retail audiences—particularly through mainstream sports sponsorships.

Key takeaways

• Circle says USDC branding will feature on Chelsea FC jerseys in the 2026/2027 season.
• The sponsorship comes about three months after the UK FCA warned football clubs about deals with “unauthorized” financial firms.
• Regulators focused on whether such sponsorships could push potentially non-compliant products to millions of fans.
• Circle notes that USDC is issued by certain regulated affiliates, but it is not issued or regulated under UK law.

Why the Chelsea sponsorship drew regulatory attention

The FCA’s warning to football clubs was triggered by concerns that some sponsorships were being used to reach football supporters in ways that may conflict with UK financial services rules. According to the FCA’s press release, the watchdog had sent warning letters to Premier League clubs regarding sponsorships with companies it described as “unauthorized,” including crypto businesses.

FCA messaging emphasized the consumer-facing nature of football sponsorship. The regulator warned that “unauthorized” firms could exploit the trust fans place in club branding to promote products that may not be properly authorized or comply with UK financial services requirements.

FCA director of consumer investments Lucy Castledine said football fans trust their club’s badge and that clubs should not allow unauthorized financial firms to put “potentially dodgy products” in front of large audiences.

What Circle says about authorization and USDC’s legal status

Circle’s sponsorship announcement includes a key distinction relevant to the FCA’s earlier concerns. The company says Circle UK Trading Limited—the group’s UK entity—has been listed as an authorized company with the FCA since 2018 to provide certain financial services to residents.

Stablecoins like USDC are also described as legal to use in the UK. However, Circle also states that USDC is “issued by certain regulated affiliates” and is “not issued or regulated under the laws of the United Kingdom.” That phrasing matters because the FCA warnings were tied specifically to unauthorized financial firms and potential breaches of UK rules.

Cointelegraph reached out to Circle and the FCA for comment, but did not receive an immediate response.

US stablecoins in the UK: legal use, but regulatory construction is still underway

While the UK recognizes stablecoins as usable, the regulatory perimeter for crypto assets continues to evolve. The article notes that lawmakers are working to establish a more comprehensive regulatory framework for digital assets, with ongoing discussion around how stablecoins—particularly those linked to fiat currencies such as the US dollar—should be treated.

In this context, Chelsea’s sponsorship deal highlights a persistent tension faced by crypto issuers and regulators: even where a product may be legal to use, the marketing channels and consumer exposure can become the focal point of compliance concerns.

The FCA’s earlier warning did not target football sponsorship as a concept; instead, it pointed to the authorization status of the firms behind the sponsorships. For investors and industry participants, that distinction suggests the marketing strategy and the corporate compliance structure of a crypto brand may matter as much as the underlying legality of a token.

What to watch next for the USDC–UK compliance picture

Chelsea’s jersey branding announcement is likely to intensify attention on how the UK’s regulators interpret “unauthorized” sponsorship risks, especially when stablecoin issuers operate through multiple affiliated entities. Circle’s reference to regulated affiliates contrasts with its statement that USDC itself is not issued or regulated under UK law—an asymmetry that may remain important for compliance assessments.

For the next steps, readers should watch whether the FCA provides further clarifications on how sponsorships should be handled when the issuer ecosystem spans authorized and non-UK-issued components, and whether any industry guidance follows the regulator’s earlier letters to clubs.

Until regulators or issuers provide more direct detail, the Chelsea deal will likely serve as a live case study for how UK oversight could shape crypto marketing and brand partnerships in the lead-up to broader stablecoin regulation.

Circle, the issuer behind the USDC stablecoin, will be the latest sponsor for the Chelsea Football Club just months after the UK’s financial watchdog warned about “questionable sponsorship deals with unauthorized financial firms,” including crypto companies.

In a Friday announcement, Circle said its name and USDC would appear on jerseys for Chelsea FC players in the 2026/2027 season. The partnership deal between the football club and the digital asset company came about three months after the UK’s Financial Conduct Authority (FCA) said it had sent warning letters to clubs in the Premier League, potentially including Chelsea.

The letters concerned “unauthorized” companies, including crypto businesses, using sponsorship deals to target football fans, potentially breaching UK financial services laws.

“Millions of football fans trust their club’s badge,” said Lucy Castledine, the FCA’s director of consumer investments. “Clubs should not let unauthorised financial firms exploit that loyalty by putting potentially dodgy products in front of millions of fans.”

Circle UK Trading Limited, the company’s UK arm, has been listed as a company authorized under the FCA to provide certain financial services to residents since 2018. Stablecoins like USDC are also legal to use in the country, though lawmakers are working to establish a comprehensive regulatory framework for the digital assets.

Notably, although Circle said that USDC was “issued by certain regulated affiliates,” the stablecoin was “not issued or regulated under the laws of the United Kingdom.” Cointelegraph reached out to Circle and the FCA for comment but did not receive an immediate response.

Related: UK government reports 240 crypto millionaires in 2025

Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently.

Justin Sun’s recent X post in which he accused a famous Chinese actress of reneging on a shady cash-for-eggs deal has caused waves in China — but perhaps not in the way that the crypto billionaire might have expected.

While for many in the English-speaking world, the most awkward and unsettling part of the story was Sun’s apparent treatment of and relationship with Jing Tian, what’s captured the public imagination in China is how much he’s relied on AI to make both his personal and business decisions.

Sun claims that he sought out Jing after a decades-long crush and paid her 30 million yuan to get her eggs.

However, he says that she subsequently demanded more money. At this point, he consulted Claude, which told him to call off the deal.

Now he’s suing her.

Read more: Is Justin Sun mixing HTX’s reserves with Poloniex?

Should Sun have used Chinese AI?

Sun’s also walking back the claims made in his story and is defending his use of AI.

In an interview with the Phoenix Network, Sun suggested that he’s using Claude “for business decisions worth tens of millions of dollars every day” and allowing it to perform “regular audits” of his companies.

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It’s unclear if he implements these decisions without additional human input or offers the audits as factual without getting them double checked by a professional auditor.

At the end of the interview, Sun seemed to not know if publishing the story was a mistake or not, seemingly blaming Claude for telling him to cut off Jing.

Phoenix Network asked Sun if perhaps his personal life wouldn’t be getting meshed with his business affairs if he had used a Chinese AI instead.

The billionaire didn’t have an answer.

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Read more: Justin Sun’s NFT marketplace managed just four sales last month

While Sun’s apparently doing everything he can to keep his name in the headlines, Jing has taken a different approach, denying Sun’s claims twice — once through her studio and once on her personal account.

Both denials have been brief and discussed settling the matter in court.

Got a tip? Send us an email securely via Protos Leaks. For more informed news and investigations, follow us on X, Bluesky, and Google News, or subscribe to our YouTube channel.

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Strategy’s two-week pause in Bitcoin sales has removed a three-month sentiment barrier after the company disposed of 6,948 BTC between late May and early August, according to Bitfinex analysts.

Bitfinex analysts said in an Aug. 28 report that Strategy’s 6,948 BTC in disposals were small compared with daily spot trading volume, but the company’s status as the largest corporate Bitcoin holder gave each weekly sale added weight among traders.

“The largest corporate holder is selling” became a recurring bearish argument between May and August, the analysts said. Although the sales did not create a large supply shock, each Monday filing left open the possibility that more coins could reach the market.

Strategy’s latest Form 8-K, covering Aug. 17 through Aug. 23, reported no Bitcoin purchases or sales. The filing was the second consecutive weekly disclosure with no change to the company’s 840,447 BTC balance.

With Bitcoin trading near $78,700, Strategy’s holdings have also moved above their average acquisition price of $75,385. The company paid about $63.36 billion for the position, including fees and expenses, placing its current value near $66 billion at the price cited by Bitfinex.

Strategy’s 6,948 BTC sales carried more symbolic weight

Strategy began selling Bitcoin in late May, ending a multiyear period during which its treasury had largely moved in one direction.

As crypto.news reported in June, the first transaction involved 32 BTC sold at an average price of $77,135. The disposal raised about $2.5 million and represented only 0.0038% of the company’s holdings at the time, but it was Strategy’s first reported Bitcoin sale since a tax-related transaction in December 2022.

Executive chairman Michael Saylor had prepared investors for the possibility during Strategy’s first-quarter earnings call. After the company reported a $12.54 billion net loss, driven mainly by unrealized losses on its Bitcoin holdings, Saylor said Strategy would “probably sell some Bitcoin to fund a dividend” and “inoculate the market.”

Larger disposals followed as Bitcoin remained under pressure during the summer. Strategy sold 3,588 BTC for approximately $216 million in early July to fund dividends tied to its preferred securities. It later sold 1,638 BTC for $104.73 million during the week ending Aug. 2, followed by another 1,690 BTC for $108.6 million through Aug. 9.

The company used the later proceeds for STRC dividends and repurchases. Its Aug. 10 filing showed that the entire $108.6 million generated from the 1,690 BTC sale went toward buying back roughly 1.15 million STRC shares.

By early August, the accumulated sales had reduced Strategy’s reserve to 840,447 BTC. Bitfinex calculated that all disposals from late May through early August totaled 6,948 BTC and generated about $432.5 million.

Against daily Bitcoin spot volume, the analysts described the amount as “a rounding error.” Market attention instead centered on whether preferred-stock obligations could turn Strategy into a recurring seller whenever its other funding channels weakened.

MSTR issuance has replaced Bitcoin as the funding source

Rather than sell more Bitcoin, Strategy raised about $2.01 billion in net proceeds by issuing approximately 18.26 million MSTR common shares between Aug. 17 and Aug. 23. The total was around six times the amount raised during the previous reporting week.

Strategy spent $136.4 million of the proceeds to repurchase about 1.43 million STRC shares below their $100 stated amount. Another $300 million went into its U.S. dollar reserve, increasing that balance from $4.8 billion to $5.1 billion.

The remaining $1.59 billion was deposited into a newly created cash account. Combined with the existing reserve, the two accounts held approximately $6.69 billion as of Aug. 23.

During the same period, Strategy bought no Bitcoin. The company has now raised roughly $2.35 billion through MSTR issuance across two weeks without directing any of the proceeds into BTC, according to the Bitfinex report.

Capital has instead gone toward preferred-stock repurchases, dividend coverage, and additional liquidity. Management designed the dollar reserve to cover payments on Strategy’s preferred shares and outstanding debt, reducing the need to sell Bitcoin when recurring cash obligations come due.

The latest allocation follows an earlier no-sale week in which Strategy raised $333.7 million through MSTR issuance. Of that amount, $149.1 million entered the dollar reserve, $132.2 million funded STRC repurchases, and $52.4 million covered STRC dividends.

Bitfinex said the pattern indicates that management currently prefers issuing common stock before disposing of additional Bitcoin. With the reserve now providing close to three years of payment coverage, the analysts viewed another BTC sale as less likely unless STRC suffers severe price pressure and other funding options become less attractive.

Strategy remains neutral rather than a Bitcoin buyer

The end of weekly sales has not yet restored Strategy’s former role as a steady source of Bitcoin demand.

Over the past two reporting periods, the company neither bought nor sold BTC, leaving its position unchanged at 840,447 coins. Bitfinex, therefore, described Strategy as neutral rather than an active buyer.

Bitcoin now competes with several uses for the capital raised through MSTR issuance. Strategy can direct the funds toward STRC repurchases, preferred dividends, debt payments, its dollar reserve, the new cash account, or additional Bitcoin purchases.

President and chief executive Phong Le has said the company expects to resume accumulation during 2026. In August, Le linked future purchases to STRC recovering toward its $100 stated amount, where Strategy could issue additional preferred shares on better terms.

“We’ll continue to build that. And yeah, when Stretch gets back to par, we’ll issue more. We’ll buy more Bitcoin,” Le said during an earlier interview.

Strategy has not provided a date or amount for its next purchase. Its filings show that supporting STRC and building cash have taken priority while the preferred stock remains below the level management wants to maintain.

Bitfinex also identified dilution as a remaining risk for MSTR holders. Issuing common shares when the stock trades at a reduced premium to the company’s Bitcoin value can weaken the Bitcoin-per-share measure that Strategy uses when discussing shareholder performance.

A renewed Bitcoin decline toward the low-$60,000 range could also tighten the company’s financing position, according to the analysts. During the summer sell-off, a weaker BTC price pushed Strategy’s holdings below cost while lower MSTR prices made common-share issuance more dilutive.

U.S. investors face exposure through MSTR and STRC

Strategy’s capital decisions directly affect U.S. investors because MSTR and STRC trade on Nasdaq, while the company reports its weekly Bitcoin and securities transactions through filings with the U.S. Securities and Exchange Commission.

MSTR investors gain indirect Bitcoin exposure through a public company, but their returns can differ from BTC’s performance because Strategy also issues common stock, pays preferred dividends, services debt and repurchases securities. Preferred shareholders rank ahead of common shareholders for dividend payments and certain claims.

The latest filing showed that Strategy sold MSTR at an average price of about $110 per share, up from approximately $96 during the previous week, according to Bitfinex. The higher price allowed the company to raise more cash per share while Bitcoin’s recovery placed its remaining treasury above its average acquisition cost.

STRC remains another factor in the company’s capital plan. Strategy designed the variable-rate perpetual preferred stock to trade near $100 and has maintained its annualized dividend rate at 12% for August while conducting regular repurchases below the stated amount.

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