Senate Confirms Kevin Warsh as Fed Chair; CLARITY Act Heads to Markup; Polymarket Volume Slips 8.9%
Coinbase CEO Brian Armstrong is backing the latest draft of the Digital Asset Market Clarity Act, calling it the strongest and most bipartisan version yet as the Senate Banking Committee prepares to mark up the bill on Thursday. Armstrong said the banking industry and crypto firms have reached a workable compromise on stablecoin yield, an issue that stalled talks in January 2025. The updated text also tightens language around DeFi, tokenized equities, and the Commodity Futures Trading Commission's authority. Industry polling cited in the lobbying effort suggests about one in five Americans hold digital assets, and 52% of surveyed voters support passing the measure.
The U.S. Senate confirmed Kevin Warsh as the next Federal Reserve chair on Wednesday after a 54–45 cloture vote that largely tracked party lines, with Democratic Sen. John Fetterman the lone crossover. Warsh had been approved as a Fed governor the day prior by a 51–45 vote, securing a 14-year term on the Board of Governors and a four-year term as chair. He replaces Jerome Powell, whose term ends Friday following months of public pressure from President Donald Trump. Warsh previously served on the Fed board from 2006 to 2011 under Presidents George W. Bush and Barack Obama.
Crypto-aligned lawmakers welcomed the appointment. Sen. Cynthia Lummis said digital asset holders now have a sympathetic voice at the central bank's top post. Warsh has described Bitcoin as a transformative technology and has disclosed personal investments in projects including Polymarket and Solana, while also criticizing parts of the sector as fraudulent. Bitcoin traded around $79,500 immediately after the confirmation, indicating markets had largely priced in the leadership change. Democratic senators raised questions during his Banking Committee hearing about his ability to remain independent from White House policy.
Ahead of Thursday's vote, lawmakers filed dozens of last-minute amendments to the CLARITY Act, expanding the debate well beyond digital asset oversight. Sen. Jack Reed reintroduced banking-industry language on stablecoin yield that would force committee members to take a public stance on rewards programs. Sen. Elizabeth Warren proposed barring banking approvals for institutions tied to the president, vice president, or members of Congress. Sen. Tina Smith offered language blocking federal bailouts for crypto firms. Other proposals touch housing policy, credit card fees, and the release of records tied to Jeffrey Epstein.
Prediction markets also saw momentum shift. Polymarket posted its first month-over-month decline in trading volume since August, with April activity down about 8.9% to $10.2 billion across its global and U.S. platforms. Rival Kalshi moved higher, reporting a 13% increase to $14.8 billion, as total prediction market volume rose 12.4% to $29.8 billion. The pullback comes as Polymarket works to fully reenter the U.S. following a 2022 CFTC settlement, while competition intensifies from new entrants such as AI-native platform Prophet and a MoonPay strategy tool. Lawmakers continue to scrutinize insider trading risks in markets linked to war, energy, and geopolitical events.
In enforcement news, former Celsius chief revenue officer Roni Cohen-Pavon will forfeit more than $1.07 million ahead of his Thursday sentencing in the Southern District of New York, according to a filing by U.S. Attorney Jay Clayton. Prosecutors said the amount reflects proceeds tied to his role in manipulating the CEL token, a charge to which he pleaded guilty in September 2023. They did not recommend a specific sentence, citing his cooperation in the case against former Celsius CEO Alex Mashinsky, who was sentenced to 12 years in May 2025 and ordered to forfeit $48 million. Separately, Judge Lewis Kaplan added $10 million to Sam Bankman-Fried's outstanding forfeiture judgment.
Taken together, the week's developments point to a market structure being rebuilt on multiple fronts. The policy debate is shifting from negotiation to legislation as the CLARITY Act nears committee action, while the Fed transitions to leadership viewed as more receptive to digital assets. Enforcement efforts continue to close out the 2022 collapse cycle through forfeitures tied to Celsius and FTX, even as new battlegrounds emerge in prediction markets and on-chain credit. The cycle's defining theme is institutional integration under tighter, clearer rules, with policy clarity beginning to replace the regulatory ambiguity that shaped the last bear market.
