The Crypto Basic

The US House Ways and Means Committee will review a broad digital asset tax package that excludes a key proposal sought by crypto miners and stakers.

The 114-page Digital Asset Tax Certainty Act, H.R. 10357, does not include a provision that would delay taxes on newly created tokens until they are sold. The committee published the bill Monday ahead of a markup scheduled for Wednesday.

That approach differs from the Tax Clarity for Mining and Staking Act, which Representative Mike Carey introduced in June. His proposal would allow taxpayers to decide when to recognize mining and staking rewards as income.

One option would tax tokens when they are received. The other would treat them more like property created by the taxpayer, with tax due upon sale. 

Leaving that provision out means staking and mining rewards would generally remain taxable once recipients receive or control them. This could create a tax obligation before recipients convert the tokens into cash.

Industry groups have pushed Congress to change that treatment. The Blockchain Association, Crypto Council for Innovation and Digital Chamber previously backed Carey’s legislation as introduced.

They argued that taxing rewards before a sale can create liquidity difficulties for miners and stakers. The groups also opposed a proposed amendment that would have capped the tax deferral period at five years.

Bill Retains Broader Crypto Tax Provisions

Although the reward-deferral proposal is absent, H.R. 10357 retains several measures affecting mining, staking and other digital asset activity. 

The legislation would classify income earned from blockchain validation as ordinary income. It would also establish rules for determining whether that income is sourced within or outside the United States.

Investment trusts that qualify under the bill could stake digital assets while retaining their trust status.

The package also proposes relief for small blockchain-related payments. Using crypto for transaction or network fees of $10 or less would not require taxpayers to recognize a gain or loss.

Additional provisions cover dollar-linked stablecoins and digital asset lending. Eligible US dollar stablecoins would receive specialized tax treatment, while qualifying crypto loans could avoid being treated as taxable sales.

The bill would also bring digital assets within constructive-sale and wash-sale rules while introducing simplified accounting methods for widely traded crypto assets.

Another measure would establish an optional disclosure process through which taxpayers could address earlier digital asset tax violations.

Earlier in June, the committee circulated seven crypto tax proposals before holding a hearing on digital asset taxation. The drafts covered stablecoin taxation, mining and staking, as well as efforts to reduce reporting burdens tied to crypto transactions.

The House tax debate is unfolding alongside a broader push to establish US rules for digital assets. The Senate is separately considering whether to advance the CLARITY Act, which addresses how the SEC and CFTC would divide oversight of the crypto market.

Ark Invest reduced several major crypto-linked positions on Monday as digital asset stocks moved higher. The firm’s biggest disclosed sale involved its ARK 21Shares Bitcoin ETF, followed by reductions in Circle and Coinbase.

According to Ark’s latest trade disclosure, the firm sold 1,528,953 ARKB shares, a position worth about $40 million at Monday’s closing price. The fund nevertheless ended the session higher, closing at $26.19, up 2.22%.

Ark also cut its exposure to Circle Internet Group, selling 142,350 shares across two funds for roughly $13.8 million. Circle shares closed at $97.42 after gaining 7.53% during the session.

The firm made another sizable reduction in Coinbase, selling 36,628 shares of the crypto exchange valued at about $7 million. Coinbase finished Monday at $191.45, rising 9.24%.

Ark’s three largest disclosed reductions were therefore all in assets that finished the session higher. The selling also extended beyond those major crypto-linked positions.

Ark Also Trims Bitmine and Bullish Positions

Ark sold 153,881 shares of Bitmine Immersion Technologies, according to the disclosed trades. The transaction was valued at about $3.96 million, while Bitmine closed at $25.76, up 2.92% on the day.

The firm also sold 18,280 Bullish shares worth about $687,693. Bullish closed at $37.62, up 7.12% on the day.

Taken together, the trades show Ark reducing several crypto-related positions during a strong market session. The moves fit the firm’s active portfolio strategy, under which it regularly adjusts holdings as share prices and portfolio weightings change.

Ark also limits individual holdings within its ETFs, with no single position allowed to exceed 10% of a fund’s portfolio. The rule helps reduce concentration risk and preserve diversification.

Clarity Act Expectations Provide Broader Market Context

Ark’s portfolio changes came as sentiment toward crypto-linked stocks strengthened, with investors also watching renewed legislative activity in Washington after Congress returned from its August recess.

Senate Republicans released a final draft of the Digital Asset Market Structure Clarity Act on Monday. The revised version incorporated several Democratic requests, including changes related to ethics and other issues that Donald Trump had previously agreed to.

Expectations around the legislation initially improved after the draft emerged, with Polymarket odds of the Clarity Act becoming law climbing to 35% before later falling to 19%. The reversal indicated that significant uncertainty remained despite the renewed legislative activity.

The next key step is a procedural cloture vote scheduled for Tuesday at 2:15 p.m. ET, with 60 votes required for the measure to advance. For crypto markets, the vote could influence expectations around the bill’s progress, while Ark’s latest trades show the firm continuing to rebalance as crypto-related assets move higher.

Balancer is moving closer to a possible shutdown after its restructuring failed to produce a sustainable revenue recovery.

The decentralized exchange has proposed an orderly wind-down that could return more than $9 million in treasury assets to BAL holders.

Balancer Labs CEO Marcus Hardt submitted the proposal on the protocol’s governance forum, saying the business continued to struggle after a major exploit weakened confidence and made user growth more difficult. The proposed closure still requires approval from BAL holders, with a Snapshot vote scheduled for Sept. 25 through Sept. 29.

Revenue Weakness Puts Pressure on Balancer

The latest proposal follows an earlier attempt to keep Balancer operating with a leaner structure.

Balancer Labs shut down in March 2026, but the protocol continued under a reduced operating model. That restructuring helped lower costs and allowed the team to deliver previously promised products. However, those savings were not matched by stronger revenue.

According to Hardt’s proposal, most protocol income still comes from Balancer v2. Meanwhile, v3 has not generated enough revenue to replace the older version’s contribution.

Hardt made a similar point in comments posted on X, saying the technology performed as intended but commercial demand remained too weak. Revenue figures cited from DefiLlama illustrate the scale of that problem.

Balancer generated about $1.13 million in protocol revenue during October 2025. In November, that figure fell sharply to roughly $371,000 following an exploit involving composable stable pools on Balancer’s older v2 system. The original report estimated the incident’s losses at $128 million.

Revenue failed to recover during 2026. According to the cited DefiLlama figures, monthly protocol revenue fell to $56,781 in August.

Hardt said the November 2025 exploit played a significant role in that weakness, even though the affected pools belonged to the legacy v2 architecture rather than Balancer v3. Notably, he said the reputational impact extended beyond the compromised system and continued to shape perceptions of the broader Balancer brand.

He later acknowledged on X that he had underestimated how long the exploit would weigh on adoption. 

With revenue still under pressure, Balancer is weighing whether staying operational could leave tokenholders with less value in the end.

Proposed Shutdown Would Happen in Stages

Under the proposed plan, Balancer would begin scaling down operations next month.

The first step would be ending new business development, while liquidity providers would have until Oct. 30 to prepare their exits. After that, pools with pause functionality would move into withdrawal-only mode, allowing users to remove funds while normal activity stops.

Pools that cannot be paused would continue operating. However, protocol fees would be reduced to zero wherever the underlying contracts permit that change.

The transition would enter another phase from Nov. 1. At that point, Balancer would maintain only the infrastructure needed to support withdrawals, while the decentralized autonomous organization, or DAO, would begin winding down.

A smaller team would remain in place to manage the process and support the final stages of closure. To cover those costs, the proposal sets aside up to $400,000 for wind-down expenses.

Hardt argued that continuing under the current model would gradually consume the remaining treasury. In his view, further spending would delay rather than change the likely outcome, making the preservation of treasury assets for BAL holders an important consideration.

Accordingly, the plan would distribute the remaining assets to tokenholders after paying all wind-down costs.

BAL Holders Could Receive Remaining Treasury Assets 

If BAL holders approve the plan, Balancer would distribute its remaining treasury based on each holder’s proportional ownership.

The first distribution is scheduled for May 2027, when holders would burn their BAL tokens to receive their share of the treasury assets.

The process would not end with that initial distribution. A second round would return any unused wind-down funds and assets left unclaimed after the first distribution, followed by a final sweep six months later.

Before any of those steps can begin, however, the community must approve the shutdown through Snapshot.

If the proposal is rejected, Balancer would remain under its existing operating structure.

The Sept. 25-29 vote will therefore determine whether Balancer proceeds with an organized closure or continues operating despite its persistent revenue challenges.

The CLARITY Act’s Polymarket probability of becoming law in 2026 dropped to 16% on Monday amid Senate Democratic resistance to Republicans’ revised ethics terms, with Democratic negotiators also working on a counterproposal.

Traders had pushed the probability to 35% after Republicans circulated revised legislation containing broader ethics provisions. The optimism faded as Democratic negotiators raised objections to the changes, threatening Republicans’ effort to secure the 60 votes needed to advance the measure. 

Senator Mark Warner, one of the Democrats negotiating the legislation, reportedly rejected the revised ethics language as not “near enough.” Politico’s Jasper Goodman later reported, citing three people familiar with the matter, that Democrats began working on their own proposal Monday and subsequently sent it to Republicans.

Tuesday’s procedural vote is the next major test for the legislation. If it fails, it could delay further progress on the bill, which would set the division of US crypto-market oversight between the SEC and CFTC.

Democrats Push Back on Revised Ethics Terms

Punchbowl News’ Brendan Pedersen reported that Senator Raphael Warnock opposed advancing the bill while what Warnock described as opportunities for corruption “in real time” remained unaddressed.

Pedersen said Senator Ruben Gallego also criticized the Republican ethics language as leaving “much to be desired” and intended to develop an alternative proposal.

In a separate report, Pedersen said Senate Banking Committee staff for Senator Elizabeth Warren circulated talking points asserting that a determination by White House ethics officials could override the proposed enforcement mechanism for state attorneys general.

Democratic support is not uniform, however. Politico reported that Senator Kirsten Gillibrand has privately lobbied colleagues to back the procedural vote.

Republican Senator Cynthia Lummis portrayed the GOP concessions as exhausted, saying Trump had accepted two significant ethics provisions and there was “nothing left to give” Democrats.

A coalition of 18 state attorneys general is also opposing the measure, adding another source of resistance.

Tribal and Banking Groups Raise Separate Objections

The Indian Gaming Association urged tribes to lobby senators against the bill. The national tribal gaming group said the decentralized-finance revisions still failed to resolve prediction-market concerns in Indian Country.

It wants the legislation to expressly preserve tribal and state gaming laws, including the Indian Gaming Regulatory Act, against preemption under federal commodities law.

Eight banking trade groups said the revisions still permit stablecoin reward arrangements that effectively resemble interest on deposits. In the groups’ view, community banks could suffer substantial deposit outflows before the proposed regulatory “circuit breaker” was triggered.

Industry Groups Rally Behind CLARITY Act

The crypto sector has taken the opposite position, calling for Senate support.

Blockchain Association CEO Summer Mersinger called on every senator to support the measure, saying Monday that the crypto industry had already made significant concessions to secure bipartisan backing.

Mersinger said passage would strengthen regulatory clarity and consumer safeguards, curb illicit activity, and make it less likely that crypto employment, developers, and innovation migrate abroad.

Crypto exchange CoinEx will close after nine years of operation, blaming a prolonged market downturn, weaker trading activity, and growing pressure from regulation and compliance obligations.

The Seychelles-based platform will stop taking new registrations on Sept. 15 and plans to discontinue most exchange services by Sept. 29. Withdrawals will remain available until Dec. 22, giving users nearly three months after the main shutdown to remove their assets. 

Market Weakness and Rising Compliance Burden Drive Exit

CoinEx attributed its decision partly to a tougher regulatory environment and rising compliance costs. The exchange also pointed to an extended market slump that had reduced trading volumes and liquidity across the industry, making conditions increasingly challenging.

Founder and CEO Haipo Yang said the risks involved in operating a crypto trading platform had become increasingly difficult to manage and ultimately influenced the decision to close.

“After much reflection, I have come to accept a hard truth,” Yang wrote on X, adding that security and compliance risks had become progressively harder to manage.

Yang said he had seriously considered selling CoinEx but decided that closing the platform was preferable because he wanted a “clean ending.”

He acknowledged that the exchange had fallen short of his original ambitions despite serving millions of users over its nine-year history. Yang said his priority in winding down the business was to ensure customers could recover all of their holdings while providing employees with what he described as a dignified departure.

CoinEx Sets Withdrawal and Custody Deadlines

CoinEx said assets remaining on the platform after Sept. 29 could be converted into USDT. Any USDT left unclaimed after Dec. 22 will be transferred to an independent custodian, which will charge a monthly fee equal to 5% of the initial balance. Users can recover those funds through the custodian until Aug. 22, 2028.

CoinEx Faced Regulatory Scrutiny Before Closure

TRM Labs alleged in a report released earlier in 2026 that CoinEx had processed flows exceeding $3.8 billion linked to Iranian entities over a period beginning in 2019. According to TRM Labs, the transactions involved Nobitex and other sanctioned counterparties.

CoinEx had served customers across over 200 countries and regions. It exited the U.S. in 2023 after settling a lawsuit brought by the New York Attorney General, which accused the company of lacking the registration required to operate.