This Week in Crypto (September 14–21): The CLARITY Act Dies 49–50, the Fed Hikes for the First Time Since 2023, and the Agencies Go Around Congress Two Days Later

The biggest item this week in crypto is a bill that didn't pass. The CLARITY Act failed a Senate procedural vote 49–50 on September 15, over ethics language about politicians' token holdings rather than anything in the market-structure text. The Fed then hiked for the first time since 2023, traders lost $571 million in longs, and by September 17 the SEC and CFTC were writing the rules Congress declined to pass. Here's the week, story by story.

The week at a glance

The CLARITY Act died over ethics language, not market structure

On the afternoon of September 15, the Senate failed to invoke cloture on the Digital Asset Market Clarity Act, 49–50 — eleven short of the 60 needed to open debate, for a bill that had passed the House 294–134 in July 2025.

The framework wasn't the problem. The blocking issue was a provision barring sitting officials and their spouses from issuing or promoting digital tokens, with two questions open at the end: whether states could charge public officials, and whether the ban reached family members. The backdrop is Trump's crypto wealth, tied to World Liberty Financial and his memecoin.

Three Republicans opposed it on the merits — Collins, Hawley and Moran — Hawley over separate stablecoin-rewards language. Thom Tillis switched to no procedurally and filed a motion to reconsider. The Democrats who negotiated the text were meant to supply the crossover votes; Gillibrand, Gallego, Alsobrooks and Cortez Masto all voted no. Gallego's reason: "All President Trump wants is for the Senate to give him time to crime."

On X: @BrendanPedersen — "The vote was 49-50, with three Republicans voting against… (Tillis voted no with a motion to recommit, procedural)."

The motion permits another vote within two days. None was taken, leaving the post-election lame duck — and any Senate bill would still return to a House that left on September 17.

The Fed hiked 25 basis points, and crypto barely reacted

On September 16 the FOMC raised the federal funds target to 3.75%–4.00%, the first increase since July 2023 and the first of Kevin Warsh's chairmanship. The vote was unanimous, 12–0, after a 9–3 split at the previous meeting where the dissents ran the other way.

Warsh gave three reasons: the economy strengthened, summer inflation trends weren't moving toward 2% fast enough, and geopolitical uncertainty stayed elevated. "The plain fact is that inflation is too high and has been for too long," he said. Most officials' projections point to at least one more hike before year-end.

On X: @byHeatherLong — Warsh's three stated reasons for moving, from the press conference.

Bitcoin held the $75,000–$76,000 band straight through the announcement. The flatness is the point: CME FedWatch had the hike at 87.3% going in, so nothing was left to price. Bitcoin spent September down only about 1.5% despite rising rates, a stronger dollar and higher oil — the more interesting fact.

Two days later, the agencies started writing the rules anyway

On September 17 the SEC released its Innovation Exemption: temporary, conditional permission for onchain trading of certain tokenized US stocks. It runs five years and took effect immediately, exempting qualifying venues from the definition of an exchange and certain automated-market-maker liquidity providers from dealer registration. Synthetics are excluded, sanctions rules apply, and issuers can refuse to let their securities trade there.

On X: @SECPaulSAtkins — "within our statutory authority… facilitating onchain trading of certain tokenized stocks."

That phrase is the story. The same day, the CFTC sent two rule texts — Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets — to the White House for review. Contents undisclosed.

An exemption in force today changes what a venue can legally build today — the difference between tokenized real-world assets as a demo and as a product.

Longs got flushed, then the money rotated into altcoins

Bitcoin came into the vote near $79,530 and fell to $75,850, down 4.2% in 24 hours. Ether dropped 3.9% to $2,407 and XRP fell roughly 10%. Crypto equities took it harder: Circle down 8%, Coinbase down 6.7%.

Per CoinGlass, about $571 million in longs were liquidated in the 24 hours after the vote, the largest flush since August 22, with bitcoin and ether longs absorbing roughly $190 million each. Shorts accounted for only about $100 million — the asymmetry of a market that had priced passage.

Then it turned. Once the SEC exemption landed and the 10-year Treasury yield slipped below 5%, 98 of the 100 CoinDesk 100 constituents rose: Starknet up 18% and Arbitrum 17% on September 18, dominance under 59%, and bitcoin closing at $80,875 — its first close above $80,000 since September 7.

ETF flows ran the same two acts: bitcoin funds were down $426.8 million heading into Friday, then took in $433 million in one session to finish the week at plus $6.2 million. Ether funds lost $140 million, breaking a four-week, $1.94 billion streak.

On X: @WuBlockchain — "spot Bitcoin ETFs recorded total net inflows of $433 million, led by Fidelity's FBTC with $311 million."

The kicker: someone borrowed $3.5M against a token worth $550,000

On September 17 at 13:28 UTC, the Starknet money market Nostra Finance paused supply, borrow, withdrawal and liquidation after one account borrowed about $3.5 million against NSTR collateral. NSTR's entire circulating market cap was roughly $550,000 — the loan was more than five times the value of the token backing it.

Per GoPlus Security's reconstruction, the attacker created a fake NSTR/SolvBTC pool holding about 1.5 SolvBTC of one-sided liquidity, then got the price feed to read that pool. Repeated swaps through it printed NSTR near $49.50 against a real price around $0.006 — roughly 8,000x — and the inflated collateral was borrowed against. The wallet had been accumulating NSTR since March.

ETH, STRK, USDC, USDT, WBTC and DAI went out, and 2.2 million STRK left Starknet via the NEAR Intents bridge. Nostra has named no oracle vendor and announced no recovery. We'd suggest reading a lending market's collateral depth before its APY — our guide to liquidation and LTV covers how that ratio behaves when the price feed is what moves.

Also this week

• D'CENT told app-wallet users to move their coins. On September 16, IoTrust detected abnormal transfers in the D'CENT App Wallet and opened a same-day investigation. Hardware wallets are said to be unaffected, but anyone using the app wallet — or sharing a mnemonic between the two — was told to move funds immediately. If that's you, our documentation on a compromised wallet is the first step.
• Solana's Transaction V1 activated on schedule. The txv1 gate went live at epoch 1035 around 01:20 UTC on September 15, raising maximum transaction size from 1,232 to 4,096 bytes.
• Chainflip restarted without Tron. Swaps resumed by September 16 after it reset Tron USDT provider balances to zero, recording each pre-migration balance on-chain. No funding source or timeline for the 736,442 USDT it owes.

What to watch next

The CLARITY motion to reconsider is live but unscheduled, so the lame duck is the window — watch whether the ethics language gets severed from the market-structure text. The CFTC's filing starts a roughly 60-day clock from September 17, putting first publication in mid-to-late November. Nostra owes a post-mortem, IoTrust a root cause, and Blockstream's Liquid post-mortem is now ten days overdue. If this week has you auditing where your keys live, our wallet security documentation covers the checks worth running. The threads from last week's roundup mostly moved — one decisively.

Last updated: September 2026