Circle shares recorded their worst single-session decline since the company went public, falling 20% on Tuesday. The drop was widely attributed to new language in a draft of the Clarity Act that proposed banning stablecoin yield, whether distributed directly or indirectly, including anything deemed economically or functionally equivalent to interest. Coinbase, which shares reserve income from USDC with Circle, also fell 10% on the day. Banking representatives were scheduled to review the draft legislation the same day.
The draft Clarity Act would task the SEC, CFTC, and Treasury with jointly defining what forms of rewards are permissible within one year of enactment. Reactions from industry figures who reviewed the text were divided, with one describing it as a departure from prior White House discussions and another calling it the best possible outcome. The mixed reception added uncertainty ahead of further legislative review.
Tether compounded Circle’s difficult session by announcing it has engaged a Big Four accounting firm for its first full independent audit of USDT reserves, after more than a decade without one. The name of the accounting firm was not disclosed. Tether claims $192 billion in assets back USDT, held primarily in U.S. Treasuries, but has previously relied only on attestations from Italian firm BDO since its founding in 2014. If the audit returns clean results, Tether would narrow the credibility gap with USDC at precisely the moment USDC’s yield model faces regulatory pressure.
The GENIUS Act, signed into law last summer, requires foreign stablecoin issuers to undergo rigorous reserve audits, and Tether’s announcement signals its intent to comply with those requirements. The timing of both developments in a single trading session represented a significant dual challenge for Circle and its flagship stablecoin product. Analysts and market participants are now watching closely to see how the legislative process and the audit outcome unfold in parallel.
Separately, CFTC Chairman Michael Selig announced the formation of the agency’s new Innovation Task Force on Tuesday, a dedicated team aimed at developing regulatory frameworks for participants in crypto, artificial intelligence, and prediction markets. The task force will be led by senior advisor Michael Passalacqua and is set to coordinate with the SEC’s own crypto-focused regulatory team. Selig described the initiative as a way to future-proof regulation and provide clear rules for builders rather than leaving them in legal uncertainty. The announcement comes as the CFTC simultaneously defends its jurisdiction over prediction markets against state-level legal challenges and pressure from congressional Democrats seeking sports betting restrictions.
New data from Dune analytics revealed that more than half of all wallets trading tokens launched on Pump.fun recorded a net loss during March. Approximately 96% of active wallets earned under $500 in total profits over the month, a figure that covers all participants on the platform, not only small retail traders. Despite processing enormous trading volume and generating hundreds of millions in fees since its launch, Pump.fun’s own PUMP token has declined more than 75% from its peak valuation of $8 billion. The data suggests that profits on the platform are concentrated among a very small fraction of participants.
Analysts at Bernstein published a note Tuesday asserting that Bitcoin has likely reached its price floor, reiterating a target of $150,000 for 2026 alongside a $450 price target for MSTR shares. The analysts highlighted Strategy‘s STRC preferred share, which carries an 11.5% dividend, as evidence that Michael Saylor has been able to continue accumulating Bitcoin through a 20% drawdown without diluting common shareholders. MSTR shares were trading near $136, down 58% from their six-month high, but Bernstein maintained an Outperform rating, describing the company’s $2.25 billion cash reserve as a fortress and dismissing concerns about a forced Bitcoin liquidation as unwarranted.
Originally reported by Decrypt.
