Dear StartEngine Shareholders:

In July, the U.S. House of Representatives passed the Digital Asset Market CLARITY Act, the first serious attempt to create a legal framework for digital assets. The bill aims to divide oversight between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), giving projects a three‑year safe harbor to build decentralized networks[1]. 

It also requires exchanges and brokers to segregate customer assets and prohibits commingling[2]. These provisions matter for StartEngine because they could dramatically expand our addressable market. 

This week, while the Senate still hasn’t voted, policymakers offered new clarity on timing and scope. Here’s what happened and why it matters for our company and your investment.

A New Timeline From the Senate

On August 20, Senator Cynthia Lummis (R‑WY) told the Wyoming Blockchain Symposium that she expects a final market‑structure bill to reach President Trump before Thanksgiving[3]. Her remarks offer two important insights:

1. Senate committees are working toward late September and October deadlines. Lummis said the Senate Banking Committee plans to approve the bill by the end of September and the Agriculture Committee by October, after which the full Senate will vote[3]. If all goes according to plan, a reconciled bill could be signed into law in late November or December.
2. The Senate will build on the House bill rather than overhaul it. Lummis explicitly stated that the Senate’s Responsible Financial Innovation Act (RFIA) will use the House’s CLARITY Act as its base and only tweak the language[1]. Senate Republicans want to honour the House’s bipartisan work, suggesting the core structure—splitting oversight between the SEC and CFTC and creating safe harbors—will survive[1].

This matters for StartEngine because our platform’s ability to list digital asset offerings hinges on a clear regulatory framework. If the Senate sticks to this timeline, the law could take effect by year‑end, giving us a predictable environment to launch new products. 

However, if budget battles or politics delay the process, we may be operating in a grey area into 2026. As investors, you should be prepared for both scenarios.

Washington’s Priorities: Market Structure First, CBDCs Later

Lummis also clarified that market structure is the Senate’s top priority. The House’s Anti‑CBDC Surveillance State Act, which would ban a federal digital currency, received only two Democratic votes and is unlikely to advance[4]. 

By decoupling the hot‑button CBDC debate from the market‑structure bill, Senators hope to avoid unnecessary partisan fights. This focus increases the odds that the CLARITY Act—or a version of it—will become law.

For StartEngine, the order of these priorities is good news. Our business model doesn’t depend on the CBDC debate; what we need is clarity around token offerings, custody, and trading. 

A market‑structure bill will determine how we can host token sales on our platform, whether we need to register with the CFTC or SEC, and what disclosures we must provide. The sooner Congress delivers those rules, the sooner we can expand into digital commodities.

CFTC’s Crypto Sprint: Early Signals for Secondary Trading

While Congress debates, regulators are moving ahead. On August 21, the CFTC announced the next phase of its Crypto Sprint. Acting Chair Caroline Pham said the initiative aims to implement the President’s Working Group recommendations and will emphasize spot trading and retail crypto market oversight[5]. 

The agency invited public feedback until October 20[5]. Pham described this phase as the beginning of a “Golden Age of innovation” and emphasized collaboration with the SEC[6].

Why does this matter for StartEngine? Our long‑term growth depends not only on primary offerings but also on the secondary trading of tokenized securities and commodities. A robust, federally regulated spot market will give our investors liquidity and encourage more issuers to raise capital through our platform. 

The CFTC’s consultation shows regulators are committed to creating this market, even before the CLARITY Act passes. We plan to participate in the comment process to ensure that any new rules accommodate crowdfunding platforms like ours.

The Gaming Sector Weighs In — an Example of Potential Issuers

An unexpected voice joined the debate this week. On August 20, video game payments platform Xsolla published a blog advocating for the CLARITY Act and submitted formal comments to the Senate. 

Xsolla argued that game‑focused tokens are not securities and asked lawmakers to affirm that tokens used to unlock in‑game content or reward participation are digital commodities, not investment contracts. The company also called for safe harbors for smart contracts that split royalties among developers and for flexible compliance paths for small studios.

This matters to us because it shows how broad the market for tokenization could be. StartEngine is not just a platform for tech startups; it can be a bridge for gaming companies, music projects, or creators to raise capital from retail investors without running afoul of securities laws. 

If the final legislation affirms that certain utility tokens are digital commodities, we could onboard a new category of issuers whose tokens would trade under CFTC rules. Xsolla’s advocacy underscores the pent‑up demand for a compliant fundraising path in industries far beyond traditional finance.

StartEngine’s Path Forward

Your management team is preparing for multiple outcomes. Here’s how we’re positioning StartEngine to take advantage of these opportunities:

1. Engaging with policymakers. We are in active dialogue with members of Congress and regulatory staff. Our aim is to ensure that crowdfunding platforms are recognized as legitimate venues for digital asset offerings and that issuer requirements are proportionate. We also plan to submit comments to the CFTC’s crypto‑sprint consultation[6].
2. Building infrastructure for tokenized offerings. Over the past year we’ve invested in custody partnerships, compliance systems and smart‑contract tooling. We’re designing products that can support token sales under Reg D and Reg CF now, with the ability to reclassify tokens as commodities once the CLARITY Act’s safe harbor kicks in. That flexibility will allow us to pivot quickly when the law changes.
3. Preparing for secondary markets. We’re working to expand our StartEngine Secondary platform, anticipating that federal oversight of spot trading will permit listing of digital commodities and tokenized equities. Liquidity is critical for attracting issuers and investors, and we expect the CFTC’s initiative to provide the regulatory basis for a nationwide digital asset marketplace.
4. Educating issuers and investors. Many companies are eager to issue tokens but don’t understand the regulatory landscape. We’re developing educational content and planning webinars once the Senate releases its final text. We want to ensure that StartEngine becomes the go‑to platform for compliant token issuance.
5. Staying nimble on timelines. Lummis’s Thanksgiving goal is encouraging, but politics is unpredictable. We continue to operate under current securities laws and won’t launch unregistered token offerings until we have clear authority. Our priority is to maintain compliance and protect investor trust.

What to Watch for Next

As shareholders, you should pay attention to three milestones:

• Senate Committee Votes (September/October): If the Senate Banking and Agriculture Committees approve the bill on schedule, expect momentum. However, any delay could push final passage into 2026.
• CFTC and SEC Rule Proposals (Fall): The CFTC’s crypto sprint will likely result in draft rules on spot trading[5]. The SEC’s Project Crypto—announced July 31—also aims to clarify token classifications, custody and safe harbors, though formal proposals have not yet been published. We will assess how these rules affect our business.
• Entrepreneur Demand: Watch how industries like gaming react. The more mainstream businesses push for tokenization (as Xsolla did), the larger our potential issuer base. We’re monitoring inquiries from sectors that were previously hesitant to engage with crypto.

Closing Thoughts

The past week didn’t deliver new laws, but it provided clearer roadmaps and new allies. A top Senate sponsor promised a Thanksgiving deadline, the CFTC launched a consultation that could open secondary markets, and the gaming industry stepped up to advocate for clarity[3][5]. 

For StartEngine, these developments represent opportunity. Regulatory clarity will unlock new lines of business, expand the universe of issuers and give investors more liquidity. But remember, deadlines slip. We’ll continue to run a disciplined business under existing rules while preparing to capitalize when clarity arrives.

Thank you for your continued support.

Best regards,  

Howard Marks  
CEO, StartEngine  

Important Disclosures

This article may contain forward‑looking statements and projections. These are not guarantees; actual outcomes may differ materially.

Investing in private, pre‑IPO companies is highly speculative and illiquid. Such investments are intended only for accredited investors who can bear the risk of total loss. Past performance does not guarantee future results. Consult a financial advisor before investing.

Securities offered through StartEngine Primary, LLC, member FINRA/SIPC. This is a general investment recommendation for accredited investors under Regulation Best Interest; it is not personalized investment advice. Review our Form CRS and Reg BI disclosure to understand our services and conflicts.

Sources

[1] [4] Sen. Lummis: Crypto Market Structure Bill Will Be Law By 2026

https://cointelegraph.com/news/senator-cynthia-lummis-crypto-market-structure-bill-timeline

[2] The CLARITY Act: Key Developments for Digital Assets | Loeb & Loeb LLP - JDSupra

https://www.jdsupra.com/legalnews/the-clarity-act-key-developments-for-8822172/

[3] Market Structure Bill Will Be Before President Trump by Thanksgiving, Says Sen. Lummis

https://www.coindesk.com/policy/2025/08/20/market-structure-bill-will-be-before-president-trump-before-thanksgiving-says-sen-lummis

[5] [6] CFTC Unveils Next Phase of Crypto Sprint to Support U.S. Digital Asset Strategy

https://coincentral.com/cftc-unveils-next-phase-of-crypto-sprint-to-support-u-s-digital-asset-strategy/