MoFo's Financial Markets & Innovation

Lawmakers Urge Passage of CLARITY Act Before August Deadline

In the first week of July 2026, prominent supporters of the CLARITY Act, which would create a comprehensive regulatory framework for digital assets and cryptocurrencies, have taken to social media and public interviews to promote the bill’s passage prior to the midterm elections. In a social media post, Wyoming Senator Cynthia Lummis urged passage of the CLARITY Act, saying “[t]his is likely our last chance to get real legislation for digital assets on the books before 2030.” In a recent interview, Commodity Futures Trading Commission Chairman Michael Selig recommended that the Senate pass the CLARITY Act and warned that the crypto industry needs regulatory certainty. Chairman Selig described the bill as necessary to prevent “regulators like [him from] writing all the rules” without bipartisan approval. The next Senate recess starts on August 8, so the bill must pass the Senate by August 7.

SEC Regulatory Agenda Includes Digital Asset Rules

The SEC is preparing a rulemaking proposal for crypto asset offerings while Congress continues work on the CLARITY Act. According to the agency’s latest regulatory agenda, the Division of Corporation Finance is considering recommending rules governing the offer and sale of crypto assets, with a Notice of Proposed Rulemaking (NPRM) targeted for issuance this month. The SEC’s proposal is currently undergoing review by the White House.

Federal Judge Denies Kalshi’s Request for Preliminary Injunction

A federal judge denied prediction market platform Kalshi’s request for a preliminary injunction to block New York from enforcing gambling laws against its sports-related offerings while the company pursues litigation accusing the state of intruding on federal authority. Prior to ruling against the preliminary injunction, the federal judge removed the New York State Gaming Commission as a defendant in the case and instead retained officers in their official capacity.

House Judiciary Democrats Request that Judicial Conference Ban Judiciary from Prediction Markets

Rep. Jamie Raskin (D-MD) and Rep. Hank Johnson (D-GA) sent a letter to the Director of the Administrative Office of the U.S. Courts encouraging the Judicial Conference to prohibit federal judges, clerks, and judicial staff from participating in prediction markets. The lawmakers discussed how judges and court personnel may have access to nonpublic information or influence over judicial outcomes, which raises concerns about insider trading and the appearance of impropriety. While existing judicial ethics rules may address some aspects of this conduct, the ranking members argued that a clear ban is needed to safeguard the integrity of the courts.

OCC Grants Preliminary Conditional Approval to Charter Connectia Trust

On July 2, 2026, the Office of the Comptroller of the Currency (OCC) granted preliminary conditional approval for the establishment of Connectia Trust, National Association, a new national trust bank wholly owned by Sony Bank Incorporated. According to the OCC’s order, the new trust bank will focus its operations on dollar-backed stablecoin issuance, non-fiduciary custody, and other stablecoin-related services. The OCC noted that Congress in the GENIUS Act has expressly recognized uninsured national banks’ authority to issue stablecoins. Key conditions include maintaining a minimum of $60 million in Tier 1 capital, conforming stablecoin activities with the GENIUS Act, and maintaining 180 days of operating expenses in eligible liquid assets.