Molly White's Citation Needed - Issue 107 – An unserious offer

Episode Date: July 23, 2026

The crypto industry has spent $200 million to get a bill too corrupt for Democrats to pass and a president too corrupt to sign anything that might meaningfully limit his grift. Originally published on July 23, 2026.

I'm Molly White, and you're listening to the audio feed for the Citation Needed Newsletter. You can see the text version of the newsletter online at citation needed. News. Issue 107. An Unsurious Offer. The crypto industry has spent $200 million to get a bill too corrupt for Democrats to pass, and a president too corrupt to sign anything that might meaningfully limit his grift. This issue was published on July 23, 26. The Clarity Act, a sweeping cryptocurrency market structure bill aimed at enshrining the crypto industry's deregulatory wins into law, may be dead.

Republicans so-called compromise on ethics, endorsed by the president, a temporary provision that would expire when Trump leaves office, enforced only by a Justice Department run by his former personal lawyer, has been met with the response it deserves. Senator Angela Alcibrooks, one of two Democrats who voted to advance the bill out of Senate banking, called it, quote, an unsurious offer. The crypto industry has spent $200 million and counting since 2024 to elect a Congress that would pass sweeping deregulatory crypto legislation. What they got was a bill too corrupt for Democrats to pass, a Republican majority too cowardly

to rein in the president, and a president who won't sign anything that meaningfully threatens his $1.4 billion a year crypto-grift. In Congress, Clarity Act. With the Senate only in session for about two more weeks before the August recess, the Clarity Act cryptocurrency market structure bills' chances of passing are growing slimmer by the day. Any hope of the bill clearing both chambers before August is already dead, given that the House begins its recess session at the end of this week. The Senate has a little longer until August 7, although some senators have already said they will be absent

next week to attend the funeral of Senator Lindsay Graham. When Congress returns in September, its members will be consumed by the midterms, leaving little time for complex negotiations. The lame duck session follows that, a notoriously challenging time for major legislation. The Clarity Act may well be kaput, under the clarity act may well be kaput, under this Congress, and the industry-tailored bill will face a significantly more challenging, if not impossible, path to law, if Republicans lose their trifecta in the midterms. In May, Senator Cynthia Lummis predicted that if the bill doesn't pass under this Congress,

the next opportunity would likely not come until 2030. While some of the bill's supporters had hoped that resolving the banking crypto impasse on stablecoin yield would allow the bill to rocket to the president's desk, significant disagreements remain. Chief among them is ethics. Senate Democrats, including those who supported the bill's progression out of the Senate Banking Committee, are insisting on some provisions that would limit the president's self-enrichment via crypto. The recent release of President Trump's 2025 annual financial disclosure, which revealed he had made more than $1.4 billion in the last year just from his crypto ventures, has only amplified these demands.

Republicans and crypto figures initially presented the latest draft, which went public on July 22nd after White House sign-off as a promising path to law. The so-called compromise on ethics would bar the president, vice president, and members of Congress from issuing cryptocurrencies, with enforcement delegated to the Department of Justice. But the provision is extremely narrow. It bars the president from issuing tokens while largely leaving untouched his family's existing web of crypto-bubrously. businesses. It gives him at least a full year to divest or move to a blind trust, his stakes in World Liberty Financial, and the Trump meme coin. And it's temporary, set to expire on January 20, 20, 29, the day a new president takes office. The provision not only fails to establish a standard for

future administrations, it shields Trump from future accountability by expressly barring enforcement of penalties for so-called pre-sunset conduct after that date. The DOJ enforcement mechanism is entirely toothless. The department is run by Trump appointees who have already shown no appetite for investigating the president's many conflicts of interest and is currently headed by Todd Blanche, a former personal lawyer to Trump. Any violations would result in a fine capped at $500,000, less than 0.04% of Trump's crypto income last year. Democratic lawmakers still hadn't seen the draft compromise the day before it went public,

but that didn't stop Republicans and the crypto industry from launching an aggressive PR campaign, pressuring them to accept it, while preemptively assigning blame if the bill fails. Quote, if Senate Democrats block this historic legislation after the administration has bent over backward to accommodate their concerns, one White House source told the Hill, quote, stakeholders should make no mistake. It is the Democrats who are blocking this legislation, because they were never serious about a legislative outcome. Democrats appear unmoved. Senator Angela Alsabrooks of Maryland,

one of two Democrats who voted to pass the bill out of the Senate Banking Committee, has described the DOJ enforcement mechanism as a, quote, unsurious offer. Democrats involved in the negotiations have previously insisted on enabling state attorneys general to enforce ethics provisions, and neither side seems willing to budge. Patrick Witt, the executive director, of the President's Council of Advisors for Digital Assets, has shown no sign of yielding,

arguing the Democrats who believe in ethics provision without state AG enforcement is meaningless are, quote, basically saying that all current federal ethics laws are meaningless, because none of them are enforceable by state AGs. Given this administration's track record on ethics enforcement, he may have a point. Other Democratic senators remain firmly opposed, Senators Murphy of Connecticut,

Merkley of Oregon and Van Hollen of Maryland held a press conference last week, condemning the bill as, quote, in and of itself a fundamental corruption if it gives Trump's corruption the power of law. Merkley added that, quote, there's a lot more wrong with this Clarity Act than simply the fact that it lacks corruption measures. Senator Elizabeth Warren of Massachusetts said the bill, quote, does nothing to stop President Trump from making his next $1.4 billion from crypto, and will, quote, supercharge his crypto corruption. Even seven of the Democratic senators most open to crypto legislation,

Alcibrooks, Booker of New Jersey, Cortezmasto of Nevada, Gallego of Arizona, Hickenlooper of Colorado, Warner of Virginia, and Warnock of Georgia, issued a statement that the draft, quote, as it currently stands, falls short. Ethics, they noted, was only one problem with the bill. Quote, key provisions including those addressing ethics for elected officials, consumer protection, illicit finance, conflicts of interest, and market integrity must be strengthened. They noted that they were still committed to negotiating an acceptable version of the bill, but given this lengthy list of concerns and the dwindling time before August recess, the feasibility of reaching agreement seems doubtful. And it's not just Democrats who may pose obstacles. Some Republicans have also expressed concerns

with the draft. Senators John Curtis of Utah and John Cornyn of Texas told Punch Bowl news they aren't happy with the result of the stablecoin negotiations and remain worried that allowing stablecoin operators to offer yield could trigger deposit flight from community banks. Quote, crypto is not going to be loaning any money for small businesses, Cornyn said. If we're taking loan capacity away from our banks who are in these communities, I want to make sure that we're not hurting the very people who rely on these banks. However, he told semaphors Eleanor Mueller that it would be, quote, premature to say whether he would vote against the current draft. Republican Senator Bill Cassidy of Louisiana also intimated that he, quote, might have concerns with the bill, but did not specify

what they were. Republicans could force the draft bill to a vote before the August recess, and Majority Leader John Thune has repeatedly hinted he may do just that, but whether even the most crypto-friendly Democrats will support it remains dubious. The bill needs 60 votes to pass, meaning at least seven Democrats must sign on. After that, it would still have to pass the House. If the Clarity Act dies, the crypto industry loses its best chance at a sweeping bill that would lock in the deregulatory gains they've achieved through agency capture. The SEC and CFTC are currently run by Trump loyalists, who have aggressively rolled back enforcement and reinterpreted their authority to favor crypto, but the crypto industry knows that agency policy can be reversed by

the next administration. That's why they've been so desperate to get the Clarity Act signed into law. Losing it would be a massive blow to the industry after it committed $200 million and counting in super PAC spending since 2024, with a sweeping legislative rewrite as a primary goal. Senator Gillibrand Senator Kirsten Gillibrand, a Democrat from New York, has been among the Democrats working to broker a compromise on the Clarity Act. Following Trump's financial disclosures, she published a statement reiterating her call for Congress to ban elected officials and their spouses from issuing digital assets, including meme coins and NFTs. Three progressive groups, demand progress, Indivisible, and The Revolving Door Project, responded with a letter to Senate Democrats, condemning her as a quote, prime example of a democratic leader whose conduct undermines efforts to hold the Trump administration

accountable for their rampant corruption. The letter cited recent reporting about her 22-year-old son, Theodore Gillibrand, who raised funding at a $300 million valuation for his American Perpetuals Exchange Corp, or APEC, a financial institution aiming to bring crypto's popular perpetual futures concept to traditional U.S. stocks. The Trump administration's crypto-friendly CFTC only recently approved the first crypto perps trading in the United States, and the younger Gillibrand will need separate regulatory approval for his venture. Participants in the funding round included prominent crypto political donors, such as Ripples Chris Larson and Erebor's Palmer Lucky. Quote, whether Gillibrand's son was able to raise funds from the crypto billionaire and other

investors due to his mother's ties, or if his investors are hoping to influence Gillibrand's thinking on crypto by supporting her son's venture, or both, the result is an appearance of unseemly conduct that undermines Democrats' credibility in criticizing corruption stemming from President Trump, his family, and their allies in the administration, the groups wrote. Axios wrote that the letter was, quote, a warning shot to Democrats. Progressive groups are prepared to make support for the bill politically painful, even if it means another bruising intra-party fight over one of the crypto industry's top legislative private. In prediction markets.

The world of prediction markets continues to be a crypto-esque Wild West. Polymarket, a leading platform and one that counts Donald Trump Jr. among its investors and strategic advisors is at the center of a recent Wall Street Journal investigation, alleging the company has been paying social media influencers to film themselves making fake trades, then using a quote, social media army to boost the videos. According to the journal's analysis of more than 1,000 videos posted by creators working with a Polymarket contracted marketing company, $1.9 million in supposed bets were placed, but none were real. Among the influencers promoting Polymarket is Aidan Ross, an Andrew Tate protege with a multi-million dollar deal with the company.

In videos, Ross repeatedly spoke about how he could profit from insider trading on Polymarket, such as by betting on the release date of an album by his friend Drake. The videos primarily target Americans, even though the New York-based polymarket has been required to ban U.S. users from its main platform since its January 2022 settlement with the CFTC. This further illustrates that Polymarket is well aware its rudimentary IP-based geo-fencing is little more than a fig leaf.

Recent research by Rutgers University statistician Harry Crane suggests Americans place between $10.6 billion and $26.7 billion in bets on the platform from May 2025 to April 26, accounting for about a third of the platform's trading volume. Yet rather than taking action against Polly Market for failing to police its platform under the settlement, the CFTC in September greenlit the company to launch a U.S. targeted app, which offers a subset of the markets available globally. Many of the bets featured in the promotional videos show trades unavailable in the U.S. app, such as those on which words President Trump will mention in speeches, suggesting Pollymarket is still actively steering American customers

towards its ostensibly off-limits global platform. Speaking of words Trump mentions in speeches, an assistant who has operated President Trump's teleprompter for a decade has reportedly been trading on those very markets. Gabriel Perez won more than $100,000 on the Cal platform, betting on markets tied to the February State of the Union address and several other speeches. According to ABC News, Perez often updates Trump's prepared remarks with edits directly from the president. Investigators identified several instances in which he had exited bets mid-speech after Trump skipped sections containing words Perez had wagered would be mentioned.

Kalshi, a direct competitor to Polly Market, also added Donald Trump Jr. as an advisor shortly after his father's reelection. The company gifted him a stake in the company worth $300,000 at the time. It's likely worth millions now that the platform's profile and valuation have soared under a friendly regulatory environment spearheaded by his father. Although press secretary Caroline Levitt claims President Trump described the incident as a disgrace and personally ordered that Perez be placed on unpaid leave, the president's own truth social platform has recently announced it plans to charge for instant access to the president's posts, leaving free users with an unspecified delay. This would allow institutional trading firms and others who pay for access to the feed to place trades on information contained in Trump's frequent posts to the site,

which often move traditional markets, crypto markets, and prediction markets. Quote, not that anyone cares, but yes, this is illegal, wrote University of Colorado. business law professor Anne Lipton on blue sky. If he'd simply said, quote, I will tell you official Iran policy in advance for a million dollars, that would be illegal tipping, and that's functionally what this is, she wrote. Trump owns a 41.5% stake in Truth's social parent company Trump Media and Technology Group via the Donald J. Trump revocable trust, of which he is the sole beneficiary. In the courts, the Department of Justice is reportedly planning to

drop charges against Matthew Gutcha, creator of the BitClub Network Cryptocurrency Ponzi scheme that defrauded investors out of $722 million. Gutcha was indicted in 2019 after offering investors what he claimed were shares in a Bitcoin mining pool and encouraging them to recruit other investors. Gutcha told his business partners that he was, quote, building this whole model on the backs of idiots, also describing his investors as, quote, dumb and, quote, sheep. When he told Told a co-conspirator to falsely, quote, bump up the daily mining earnings starting today by 60%. His partner replied, quote, that is not sustainable. That is Ponzi territory and fast cash-out Ponzi.

But sure. He later directed a co-conspirator to reduce the supposed mining earnings so he could, quote, retire RAF, exclamation points, meaning rich as fuck. Goetcha has been lobbying the Department of Justice for relief from the prosecution, hiring a team of lawyers with connections to President Trump. Among them is Bradford Cohen, an attorney who appeared as a contestant on The Apprentice in 2004 and has been an avid Trump supporter ever since, and Brett Tolman, a lawyer and Fox News contributor who has been helping clients lobby for Trump pardon since the first Trump administration.

Among Tolman's past clients are Charles Kushner, father of Trump's son-in-law Jared Kushner, and CryptoCosteleb Ross Ulb. Cohen has also been in the first. the Trump pardon business since Trump's first presidency, successfully lobbying for clemency for rappers Lowell Wayne and Kodak Black. Miles Guo, also known by Guo Wangwei and several other names, has been sentenced to 30 years in prison on multiple charges related to a series of crypto-related frauds that netted him more than $1 billion. Guo was once closely connected with former Trump strategist Steve Bannon, and the two co-founded the GTV Media Group firm that was ordered to pay

$539 million in a settlement after an unregistered initial coin offering of so-called G-coins in 2020. It was aboard Guo's super yacht that Bannon was arrested on fraud charges that same year. In Regulators. Circle, the operator of the USDC Stablecoin, has received final approval from the Office of the Comptroller of the currency to operate as a National Trust Bank. This means the company will now be able to manage reserves directly for its stable-quine. although it is more limited than commercial bank charters and does not allow the company to take deposits or make loans. Comptroller Jonathan Gould has served in the office of the comptroller of the currency under both Trump administrations. Between the two, he was a partner at Jones Day,

where Circle was among his clients. The approval and conditional approval of a slew of applications by cryptocurrency companies for National Trust Bank charters has drawn concern from various sources, including Senator Elizabeth Warren, who said in a May letter that the agency had, quote, approved at least nine National Trust charters for crypto companies that intend to engage in activities that appear to go far beyond the narrow set of activities permitted by law. These companies are effectively crypto banks that want to evade the fundamental safeguards and obligations that come with being a bank. Your decision to facilitate this regulatory arbitrage not only conflicts with federal law,

it also poses serious risk to consumers, the safety and soundness of the banking system, and the separation of banking and commerce. In April, she had opened an inquiry into the OCC's approval of a bank charter for Erebor, a new neobank founded by Palmer Lucky, also an investor in Theodore Gillibrand's venture, and backed by the likes of Peter Thiel and Joe Lonsdale. As part of her inquiry, she published a fundraising document circulated by Arabor to potential investors, which had promised the bank would obtain a charter within a remarkably short six months. A co-founder's, quote, unique connectivity to banking regulators, especially Jonathan Gould, next comptroller, and Palmer's political network will get this done, the memo read. In an inquiry letter sent to Lucky, she asked, quote, which Arabor co-founder had, quote, unique connectivity to comptroller.

Jonathan Gould. Is it Jacob Hirschman, a former executive at Circle Financial, one of Comptroller Gould's former clients? She also noted that Aribor's charter application had been submitted by Adam J. Cohen, who was named Chief Counsel and Senior Deputy Comptroller of the OCC only two months later. The CFTC has reached a final resolution with Celsius founder Alex Michinsky, who is already serving a 12-year prison sentence for fraud and market manipulation. Now he is also banned for life from any commodities activities. In elections and political influence, crypto packs have surpassed $73.1 million in spending on the midterms, though recent weeks have not featured any truly massive expenditures on any given race, like the ones we saw in New York,

Alabama, or Illinois earlier this primary season. One race the crypto sector is watching is in Michigan's District 13, where the Fair Shake Network has spent just under $1 million. to support Democratic incumbent Sri Tanadar and oppose his primary opponent Donovan McKinney. Tanadar has published press releases on his website, boasting that he, quote, proudly voted for the clarity, genius, and anti-CBDC surveillance state acts, talking about how, quote, we need to support innovative solutions such as cryptocurrency and blockchain technology. Donovan published a video denouncing the industry's spending in his race, saying, quote, the crypto lobby is paying my opponent back, for helping Trump make over $1 billion off crypto since taking office. I'm running to take on

lobbies like crypto and APAC to fight for an agenda that puts money back in the pockets of everyday people. Although Tanedar likely appreciates the roughly $1 million in support for his campaign from the crypto sector, it has not managed to fill the whole crypto has left in his finances. Tanadar is currently reporting negative receipts in his campaign filings, something I did not previously know was even possible. It turns out Tanedar invested millions of dollars of his campaign's funds, most of which he personally loaned to his campaign into crypto. As of his most recent filing, he has reported $3.9 million in investment losses to date. While it is legal for candidates to invest campaign funds, quote, you're usually going to find they're going to put it in something a little

less volatile than the crypto market. Open Secrets Director of Insights Brendan Glavin told the Intercept. In Minnesota, progressive independent Bernie Sanders pledged that, quote, together, we are going to take on crypto, the AI industry, A PAC, and other billionaire super PACs, and send Peggy Flanagan to the United States Senate. Flanagan is challenging current representative Angie Craig for the Democratic nomination. These packs have yet to spend in the race, though Sanders seems to think they plan to enter the fray. This does seem likely, given her opponent Angie Craig co-sponsored the Clarity Act. Executives from 16 cryptocurrency and cryptocurrency associated companies, including Coinbase, Andresen Horowitz, and Kalshi, have directly contributed

almost $175,000 to Craig's campaign, and Fairshake contributed nearly $1 million to Craig's House campaign in 2024. The Web 3 is going just great recap. There were 13 entries between June 19 and July 22nd, $69.03 million was added to the grift counter. 42 Dow's balance coin, algorithmic stable coin crashed after a $912,000 theft. Wan Chain Bridge on Cardano was exploited for more than $9 million. Allbridge was exploited for $1.66 million. The across protocol was exploited for $3.35 million. Ostium lost at least $24 million to an Oracle exploit.

Bonzo Lend was exploited for $9 million in an Oracle attack. Summer Finance was exploited for $6 million and then shut down. The Dutch Nacken crypto platform collapsed with $8 million in customer funds missing. Polymarket customers lost $2.97 million, with a company blaming a third-party vendor. Users of the Second FI, Cardano Wallet, lost $2.4 million in a series of hacks. The Tyco Bridge was exploited. a highly active MEV bot known as Jared from Subway.Eath was drained for $7.7 million, and Main Street USD lost its dollar peg.

In the news, I was honored to be the first guest on Brian Merchant's new Blood in the Machine podcast, where we talked about my tech influence watch project and why the tech sector is pouring hundreds of millions into American elections. That episode is titled The AI Industry is pouring hundreds of millions into U.S. elections. I also joined Paris Marx's Tech Won't Save Us podcast to talk about Tech Influence Watch and the AI and crypto sector's political spending. That episode was titled The AI Industry is Spending Big on the U.S. midterms. Open Secrets did a deep dive into Fairshake, the cryptocurrency industry's super PAC network that has raised more money than any other super PAC outside of the Senate Leadership Fund, the Senate Republican Super PAC. In the article, I talk about the

network structure and their incredibly aggressive spending NPR strategies. That's titled Crypto Money is flooding both parties. It's coming from the same place. I spoke to NPR and Puck about AI industry super PACs and their influence on the midterms. Heather Cox Richardson and the Guardian quoted me talking about President Trump's most recent financial disclosure that revealed more than $1.4 billion in crypto revenue over the past year. That's all for now, folks. Until next time, This has been Molly White. Thanks for listening to this issue of the citation-needed newsletter. If you would like to support my work with a free or pay-what-you-want subscription to the citation-needed newsletter,

or if you would like to receive these issues in your email, go to citation-needed.news slash sign-up. If you enjoyed the podcast version of this episode, please consider leaving a rating or review in your podcast player of choice.