The Daily: Republicans reject Democrats' offer ahead of Clarity Act vote, and more

The following article is adapted from The Block’s newsletter, The Daily, which comes out on weekday afternoons.

Happy Tuesday! Bitcoin slipped back below $77,000 as markets braced for today's Clarity Act vote and the Fed's interest rate decision on Wednesday, with Block Scholes research analyst Thahbib Rahman noting that crypto derivatives remain surprisingly calm despite the two major risk events looming.

In today's newsletter, Republicans reject the Democrats' counteroffer on the Clarity Act as the vote nears, Standard Chartered sets a 70-fold price target for Arbitrum, CoinEx shuts down after nine years, and more.

Meanwhile, Balancer proposes winding down the protocol and distributing its treasury to BAL holders.

P.S. Don't forget to check out The Funding, a biweekly rundown of crypto VC trends. It's a great read — and just like The Daily, it's free to subscribe!

Lead Senate Republican Lummis rejects Democratic counteroffer as Clarity Act vote nears

Senate Republicans rejected a Democratic counteroffer on the Clarity Act hours before Tuesday's initial vote, leaving the crypto bill in limbo.

• Senate Republicans, led by Sen. Cynthia Lummis, R-Wyo., released their "final" Clarity Act draft on Sunday.
  Democrats floated the counterproposal on Monday night, seeking to tighten the contested ethics provision aimed at President Trump's crypto ventures.
• Lummis' spokesperson Katie Warbinton dismissed the Democratic offer as "identical" to their position weeks ago, saying they need to "actually start negotiating instead of resubmitting the same demands and calling it progress."
• Sen. Mark Warner, D-Va., pushed back, telling Semafor the counteroffer was no surprise since it's "language Democrats have been seeking for the better part of a year."
• The Republican draft lets state attorneys general help enforce the ethics rules, and requires officials to divest a "significant financial interest" or use a blind trust, but Sen. Elizabeth Warren said there were still loopholes since the DOJ would decide whether to act against Trump.
• The Senate holds its first procedural vote shortly, which looks difficult to clear given the lack of Democratic support, with several more steps needed before the bill could reach Trump's desk, even if passed.

Standard Chartered sees Arbitrum at $10 by end-2030, up 70-fold

Standard Chartered initiated coverage of Arbitrum's ARB token with a $10 end-2030 target, a roughly 70-fold jump from about $0.14 today, as traditional finance increasingly moves onchain.

• Global Head of Digital Assets Research Geoff Kendrick expects ARB to outperform BTC and ETH over the period, highlighting Arbitrum's Expansion Program, which collects a fee equal to 10% of net protocol revenue from external chains built on its tech stack.
• Robinhood Chain alone is averaging $2.8 million in daily fees in early September, lifting Arbitrum's monthly revenue to more than five times its pre-launch level.
• Kendrick argued that Robinhood Chain's early success could draw more TradFi chains onto Arbitrum's tech stack, potentially re-rating ARB closer to Layer 1 valuations.
• However, he flagged slower tokenization, rival-chain competition, and ARB's lack of direct value accrual as risks to the forecast.

Crypto exchange CoinEx to shut down after 9 years, citing market slump

Crypto exchange CoinEx is shutting down after nine years, halting new registrations from Sept. 15 and most services by Sept. 29, though withdrawals remain open until Dec. 22.

• The Seychelles-based exchange said the decision was due to the prolonged market downturn, shrinking volume and liquidity, and rising regulatory and compliance costs.
• Founder and CEO Haipo Yang said he considered selling the platform but chose a "clean ending" that lets users withdraw in full.
• CoinEx served users in more than 200 countries but exited the U.S. in 2023 after settling with the New York AG.
• Earlier this year, TRM Labs published a report claiming that CoinEx had processed more than $3.8 billion in flows linked to Iranian entities since 2019.

Zama expands confidential Morpho lineup after first vault hits $40 million, launches private swaps on Ethereum

Confidentiality protocol Zama is opening deposits into 16 confidential Morpho vaults, spanning assets like USDC, USDT, AUSD, and TGBP.

• The move follows its first vault, launched with Morpho and Steakhouse Financial in June, which grew from zero to $40 million in total value locked within seven weeks.
• Curators include Steakhouse, Armitage by Wintermute, Flowdesk, RockawayX, and Bitwise, with 12 of the vaults offering confidential access to existing Morpho products and four built for confidential deposits only.
• Zama has also launched a swap protocol letting users trade between confidential assets on Ethereum without revealing transaction size or intent, pitched at institutions wary of exposing positions onchain.

US DOJ seeks $61 million in crypto proceeds from illicit Iranian oil sales laundered on Binance

The U.S. Justice Department has filed a civil forfeiture complaint seeking about $61 million in crypto proceeds from black-market sales of sanctioned Iranian oil, allegedly meant to fund Iran's government and military, including the IRGC.

• Prosecutors alleged two Chinese firms, Blessed Trust and Hexa Whale, used Binance accounts to launder the proceeds and funnel funds to Iran and its proxies while posing as legitimate custody and brokerage services.
• The DOJ also identified a series of interrelated unhosted crypto addresses, dubbed "Entity A," that it said moved more than $1.5 billion in illicit Iranian oil proceeds.

In the next 24 hours

• UK CPI numbers are out at 2 a.m. ET on Wednesday. U.S. mortgage data follows at 8:30 a.m. The U.S. Federal Reserve's latest interest rate decision is due at 2 p.m. ET, with economists forecasting a 25 bps hike.
• A U.S. FOMC press conference is scheduled for 2:30 p.m.
• Arbitrum and IOTA are among the crypto projects set for token unlocks.
• UN Blockchain Week and Conf3rence continue. European Blockchain Convention and Avalanche Summit get underway.

Reader poll

The Clarity Act's cloture vote is this afternoon, needing 60 votes with at least seven Democrats. Do you still think it clears the hurdle?

YES, IT ADVANCES

NO, IT STALLS

One click records your pick. We'll share the result in a later edition.

*53% of respondents in last Tuesday's poll said they expected the Clarity Act's procedural vote to fail.

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