Democrats Win Congress as CLARITY Runs Out of Time

gm, Defiers!

These are the biggest stories in DeFi and crypto:

• Democrats won Congress as CLARITY stays stuck
• Polygon may fork to return 70M stolen POL
• Binance widened its reserve proof to 44 tokens
• Morgan Stanley tokenized stocks through DTCC
• Circle's network hit $41.3B annualized volume

Bitcoin fell to about $75,600 as results came in on Tuesday night, then reclaimed $79,000 within 12 hours as Democrats secured both chambers of Congress. Ether and Solana recovered by similar amounts. Tokens linked to the Trump family did not. World Liberty Financial's WLFI fell 11.3% and was still 5.1% lower at 5 a.m. ET, and TRUMP ended the night about 6.6% lower.

The Associated Press called the Senate late Tuesday and the House early today. The CLARITY Act, crypto's market-structure bill, is still stuck on the Senate floor. On Sept. 15, a vote to start debate failed 49 to 50, with no Democrat voting yes. If the bill does not pass before this Congress ends on Jan. 3, it starts over. Ending debate takes 60 votes under either party's majority. By our count, CLARITY needs 11 more yes votes than it got in September.

Much of crypto policy now runs without Congress. The stablecoin law, GENIUS, takes effect on Jan. 18, 2027, under a rule the OCC finalized in October. The SEC and CFTC chairmen have said they will write crypto rules without CLARITY. On Tuesday, the CFTC cleared single-stock perps and SEC staff called Canton Coin a digital commodity. Neither action needed a vote. What the election changes is oversight. Elizabeth Warren is in line to chair Senate Banking, and Democrats take the two House committees that wrote CLARITY. Warren and Maxine Waters have both tied crypto legislation to limits on the president's crypto businesses, including World Liberty Financial. From January, they would set the hearing agendas.

The industry read the result in different ways. Stand With Crypto said on X that more than 50 "pro-crypto new members" are heading to Congress. Its endorsed winners include Democrats such as Ritchie Torres and Josh Gottheimer. Republican Sen. Cynthia Lummis wrote that CLARITY delivers the anti-money-laundering exams Democrats asked for, and that "Democrats voted against cracking down on crypto money laundering." The Digital Chamber turned to the SEC instead and filed comments on its transfer-agent proposal "after the Senate postponed Clarity Act efforts."

For DeFi protocols, what a bill covers matters as much as when it passes. Christopher Robins, general counsel at the lending protocol Morpho, said in a statement sent to The Defiant that the risk is "getting regulation wrong," whichever party writes it. "We need to regulate financial activity involving intermediaries, not decentralized protocols or software," he said.

If you are waiting on CLARITY, watch the Senate floor calendar between now and Jan. 3.

Read more below!

As of 19:47 UTC, Nov. 4. Data: CoinGecko, Aave, Hyperliquid. Full list

REGULATION

Democrats Win Senate Control as CLARITY Act Remains Stalled

Democrats took the Senate when Josh Turek beat Republican Ashley Hinson in Iowa, a call the AP made at 11:35 p.m. ET. Senate Agriculture also shapes crypto market-structure rules, and Democrat Cory Booker has said he would like to chair it if Amy Klobuchar leaves. Separately, a federal appeals court denied Coinbase and Kalshi protection from Connecticut and New York gambling enforcement while they appeal. Solana fell below $90 during the count.

Democrats Win Senate Control as CLARITY Act Remains Stalled

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BLOCKCHAINS

Polygon Proposal Seeks Hard Fork to Recover 70.49 Million POL

Polygon validators are being asked to approve a hard fork that would move about 70.49 million POL, worth roughly $6.8 million, from five blocked addresses to recovery wallets for Polymarket and Binance. Block producers already froze the addresses at the firms' request, which kept the POL in place but gave no way to return it. The fork would reassign the balances without the holders' signatures. It would not reverse earlier transactions. The draft has no activation block yet. Chains that can do this can return stolen funds, and they can also take funds from any address.

HACKS

Binance Expands Proof of Reserves to 44 Tokens After Hack

Binance expanded its proof of reserves to 44 tokens, up from 10, and says it has replaced about 98% of the affected assets. The new snapshot is from 7 p.m. ET on Nov. 3, and the proof will take 50 to 60 hours to compute. Teng said fully reopening withdrawals is still ahead. Privacy Cash paused new deposits after Binance-hack funds reached it, and the Mercado Bitcoin attacker swapped tokens for $10.55 million in ETH through MetaMask's router.

TRADFI AND FINTECH

Morgan Stanley Tokenizes US Stocks and Treasuries Through DTCC

Morgan Stanley converted U.S. stocks and Treasurys into tokens through DTCC's tokenization service, a week after it went live. Apple, Home Depot and GE Vernova objected to OKXICE, bringing the total to 59. Onchain, Dialectic launched a vault that borrows USDC on Aave against tokenized SpaceX, and NEAR added a 24/7 NIFTY 50 perp. Coinbase opened Deribit options and perps to U.S. Prime clients.

TRADFI AND FINTECH

Circle Payments Network Reaches $41.3 Billion Annualized Volume in Q3

Circle Payments Network reached $41.3 billion in annualized volume in the third quarter, up from $2.7 billion a year earlier, with 205 institutions enrolled. That figure is a run rate. Circle's retained revenue rose, but it included $182 million from ARC token presales while income from USDC reserves fell. Stripe opened stablecoin payouts to wallets in more than 160 markets for U.S. businesses, and Block reached a $964 million deal in principle with the DOJ over anti-money-laundering lapses.

Other Stories Worth Your Time

Polkadot Treasury Lost $1.38 Million After XCM Patch Missed Production — the fix was merged in June but never reached the affected software.

BitMart Founder Confirms Hack During Restructuring — he says its security team is “severely understaffed.”

Lightning Labs Releases LND Mitigation for Critical Linux Flaw — plus Core Lightning urged an upgrade to 26.06.10 to fix channel flaws.

THORChain Restarts Most Swaps, With 14 Nodes Yet to Upgrade — three connected networks remain halted.

Blast Shuts Down Layer 2, Directs Users to Recovery Site — plus ApeChain plans to switch from LayerZero to Chainlink CCIP.

South Korea’s Ruling Party Formally Seeks Crypto Tax Delay — and Hong Kong passed a crypto tax reporting bill starting in 2027.

Zcash Climbs 9.5% Ahead of NU7 Network Upgrade — plus our guide to privacy coins.

Osmosis Burns 55.5 Million OSMO From Community Pool — about 46.5% of the pool's OSMO.

Strategy’s STRC Hits $100 for First Time Since May — the price Strategy requires before it sells new shares.

Riot Signs $28 Billion AI Lease for Entire Corsicana Campus — the 15-year lease with Anthropic covers 910 megawatts.

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