Bitcoin Brief

Sup, freaks.

The changes to the BRCA section of the CLARITY Act aren't particularly surprising, but they're disheartening. After all the work that has gone into getting protections for developers into this bill, the sponsors are now describing a compromise that limits those protections to civil cases. I want to walk through why that matters, particularly as the push to get the bill moving picks up.

Inside Today

• CLARITY's latest compromise. What civil-only BRCA protection means for the debate over developers.
• Who controls the tools? The AI slowdown debate crosses borders while Latham builds its own model infrastructure.
• Money and personal security. Michael Howell on liquidity, the latest CPI report and the Revolut data breach.

Plus: an Electrum Lightning backup fix worth checking before you need it.

LEAD STORY

CLARITY Moves Ahead With a Civil-Only BRCA Compromise

I've been following the Blockchain Regulatory Certainty Act because it gets at a pretty basic question: can you publish software that lets people hold and use their own money without being treated as a money transmitter? The people building these tools need to know where that line is. We've spent months watching Congress try to draw it.

This morning, Senators Cynthia Lummis, John Boozman and Tim Scott released their latest CLARITY draft. Their announcement describes BRCA edits that shield developers from money-transmission registration requirements and establish a “strong civil safe harbor.” The supporting document is considerably more direct. Under Title VI of “126 Democratic Wins in the Clarity Act”, it lists:

Edits requested by Democrats on the Blockchain Regulatory Certainty Act, which restricts developer protections to civil only, including the Bank Secrecy Act.

That phrase, “civil only,” is the part worth paying attention to. The criminal-law question has been a big part of this debate from the beginning.

Compare that with the September 10 draft. Section 10604(c) expressly said a qualifying non-controlling developer or provider shall not be treated as a money-transmitting business under 31 U.S.C. 5330, or as “engaged in money transmitting, as defined in section 1960 of title 18, United States Code.” That second reference matters because Section 1960 is a federal criminal statute. A person convicted under it can face up to five years in prison.

The prior provision defined the protected developer through legal rights and the ability to control or effectuate user transactions. It also covered specified software publication, customer self-custody tools and infrastructure support in its registration protections. Somebody calling a business “noncustodial” would still have to satisfy the actual statutory definition.

The September 10 draft also preserved a criminal exception. Subsection (d) retained the application of Section 1960(b)(1)(C) to a person acting with the specific intent to transfer, on someone else's behalf, funds the person knew came from a criminal offense or were intended to promote or support unlawful activity. Prosecuting that conduct and treating a software publisher as a financial intermediary are different questions. The old language at least attempted to draw that boundary.

Now the sponsors describe a compromise limited to civil protection. I don't find these edits surprising, but it is disheartening to see developer protections chipped away as the bill gets closer to a vote. A developer worried about criminal prosecution for publishing a tool that leaves users in control of their money is going to want a better answer than that.

We've been working through this for a while. In May, we examined the criminal carve-out and argued that it needed a tighter connection to direct, intentional facilitation of a specific criminal act. The existence of a section called “developer protection” was never enough. The protection had to survive contact with an aggressive prosecution theory.

In June, I wrote that no bill is better than a bad bill. That piece also said the solution was to fix the language, rather than gut the provision. Then in July, we made the practical standard explicit: “Open-source developers need protection that is durable and legible. A safe harbor that requires years of litigation to understand is not much of a safe harbor.”

I keep coming back to the person deciding whether to contribute to a wallet or a privacy project in the first place. They need to understand what they're allowed to build without having to spend years and a fortune finding out in court. When that answer is unclear, some will build somewhere else and some will decide it isn't worth the trouble. We all end up with fewer tools to choose from.

For those of us who want bitcoin to be money we can hold and use ourselves, this is a practical concern. We need people willing to write and maintain the software. I'd like Congress to give those people a clear distinction between publishing a tool and personally participating in a crime, one that holds up when a different administration takes over.

The Trump administration seems determined to get this moving. Patrick Witt has urged senators to vote Tuesday to get on the bill and continue the legislative process, and last night he said it was time to pass it. Tomorrow's scheduled action is a Senate floor vote on cloture for the motion to proceed. The sponsors say the revised text would then be offered as a substitute amendment if that vote succeeds. It'll be interesting to see how this plays out, and whether the push to get a bill passed leaves room to address these concerns.

Hopefully the people trying to get CLARITY across the finish line will give the developer question the attention it still needs. It's worth getting this part right.

SIGNAL

The AI slowdown campaign goes geopolitical

The debate we covered Friday keeps getting bigger. Dario Amodei wants embedded evaluators, coordinated limits on frontier progress and government support for industry coordination. The China reaction surfaced by choblin29 adds another dimension: Reuters reports that a Global Times editorial called the proposed China restrictions a Cold War tactic.

Trump isn't interested in slowing down. In his Truth Social post this morning, he went after Amodei, argued that the administration already has substantial criminal and regulatory power over the companies, and declared, “WHOEVER WINS AI, WINS!” He wants the United States to keep its lead over China.

As far as the administration is concerned, the show must go on. I think the next few days will be interesting as the labs make their case for coordination while the president pushes in the other direction. In the meantime, I'd like to see more people putting open models to work for themselves.

Latham is buying itself AI options

Anand Iyer's post points to a practical answer to the AI-control debate. Latham & Watkins has purchased Nvidia hardware and is experimenting with fine-tuning open-weight models. Bloomberg Law spoke with the firm's AI leaders: the servers are active in a third-party data center, and the firm continues using outside AI services too.

Working from first principles, I think this is where businesses end up over time. If your IP and client information are central to your business, why wouldn't you want the option to run models without sending that information to a frontier provider? Investors in Anthropic and OpenAI should think hard about what that means for their long-term business models. I suspect there's an enormous, underserved market for companies that help firms like Latham deploy and maintain private AI systems. Getting this working reliably takes expertise, and I think a lot of value will be created by the people providing it.

Howell sees a long-term hedge and a short-term warning

Michael Howell's “China, Gold And Crypto” argues that governments' growing funding needs will keep pushing monetary policy toward liquidity creation. He favors gold and bitcoin as defenses against the resulting erosion of purchasing power. That is an argument I have been making for a long time: the political system keeps finding ways to postpone dealing with the debt, and savers carry the cost.

Howell also warns that the near-term picture is less supportive as liquidity growth slows. His thesis leaves room for weakness before the longer-term pressure works its way through asset prices. I think that distinction is important. Being convinced about bitcoin's long-term role doesn't tell you what the price will do next week. Keep your near-term obligations covered and give your savings time. Governments can drag this process out much longer than any of us would like.

Inflation is still taking its cut

The Bureau of Labor Statistics reports that the Consumer Price Index rose 0.4% in August on a seasonally adjusted basis and 3.4% over the past year before seasonal adjustment. Excluding food and energy, the index rose 0.3% for the month and 2.4% over the year on those same respective bases. Households still have to buy the food and energy, of course.

Higher prices accumulate. A slower inflation rate in one category doesn't put last year's purchasing power back in your savings account. That is why I keep separating the next central-bank decision from the longer-term question of what to save in. You need dollars for bills and short-term commitments. For money you intend to carry into the future, persistent purchasing-power erosion deserves much more attention than whatever narrative happens to dominate the next press conference.

Revolut handed customer records to an impostor

Revolut says it handed customer information to an unauthorized party submitting fraudulent requests from a legitimate government-agency email domain. Customer notices describe exposed identity documents and contact details; financial records and transaction histories may also have been disclosed. Revolut says its systems and customer funds were unaffected and it has contacted a limited number of customers. It hasn't disclosed how many.

This is why collecting all this KYC information bothers me. A passport, home address and financial history are a dangerous combination to hand over. Changing a password won't undo that exposure.

If you use Revolut, verify any notice through the app yourself. Don't trust an unexpected caller just because they know your details, and never move money to a supposed “safe account” at their instruction. There's a lot more to dig into here.

ETF FLOW CHECK

U.S. spot bitcoin ETFs recorded approximately $462.7 million in net outflows across last week's four sessions. September remained approximately $307.4 million positive through September 11. These figures exclude today's session.

⚡ FREEDOM TECH CORNER

Electrum users: check your Lightning backups

Electrum 4.8.2 fixes a specific Lightning backup problem. Its release notes say exported channel and full-wallet backups for anchor channels in wallets with non-deterministic Lightning keys were missing a key needed to sweep funds after requesting a remote force-close. Affected wallets warn on startup, and users need to export fresh backups. The notes explain how to identify those wallets; this does not apply to every Electrum wallet. Download from the official site, verify the release signature and follow the affected-wallet guidance before assuming an old backup has you covered.

DATA SNAPSHOT

As of September 14, 2026, approximately 2:02 p.m. ET; Bitcoin Lab daily observations dated September 13 UTC

Sources: Coinbase for spot price; mempool.space for network data; Bitcoin Lab for the five daily on-chain valuation and spending metrics. MVRV compares market value with realized value; realized prices reflect on-chain cost bases, and SOPR compares spending prices with acquisition prices. Daily observations are separate from the live spot reading.

If you found this useful, forward it to a friend who wants to understand what is happening in bitcoin and why it matters. Onward, Marty

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