Clarity Act entangles in debate over whether to sell cryptocurrencies to bar president
A sweeping cryptocurrency bill is headed for a final vote in the Senate this summer, backed by Republicans and some Democrats — and backed by an industry that has spent tens of millions of dollars shaping it.
But a major problem has recently emerged: the $1.4 billion in cryptocurrency revenue that President Trump disclosed in June, after a year of prodigious money-making in his family’s network of crypto businesses.
Now, as landmark legislation known as the Clarity Act nears passage, Senate Democrats are pushing for strict wording in a bill that would ban public officials from selling digital currencies. On Wednesday, Republican senators issued a new draft law which contained a version of those restrictions, including language that prevented the president and other US officials from issuing or sponsoring cryptocurrency.
Immediately Democrats and progressive groups fired reararguing that the proposal did not go far enough to prevent Mr. Trump from using cryptocurrencies to enrich himself. With the midterm elections looming, the debate looms absorb the Clarity Act, which shows how Mr. Trump’s crypto businesses have spread in Washington.
The ethical issue has “become the linchpin of whether this gets bipartisan support,” said Cody Carbone, executive director of the Digital Chamber, a cryptocurrency trade group. “Democrats made it the most important thing.
The passage of the Clarity Act is a top priority for the crypto industry. Under the Biden administration, the Securities and Exchange Commission has waged an aggressive enforcement campaign against crypto firms, filing lawsuits arguing that digital coins should be regulated like stocks and bonds. The Trump administration reversed course and dropped nearly all of those lawsuits.
A bill that passed the House of Representatives last year would effectively lock this policy position into law so that crypto companies can operate freely in the United States without fear of regulatory interference from a future administration.
Democrats have voiced concerns about the bill for months, pointing that it would give authority over the industry to an understaffed federal agency with limited law enforcement capacity.
But no issue has drawn more attention than Mr. Trump’s crypto businesses. Last month, the president released his mandatory financial report, which showed he had earned more than $2 billion in the first year of his second term, most of it from cryptocurrencies.
Those gains came at the expense of ordinary investors, who lost a total of $3.8 billion after buying Mr. Trump’s so-called memecoin, a new cryptocurrency known for its volatility.
Nothing in the latest Clarity Act bill would prevent Mr. Trump from continuing to profit from his memecoins or other crypto businesses, he said. Democratic staff and other industry experts who have reviewed the language.
“The Senate majority passed a bill that would not effectively stop the main ways he made that money — or could continue to make it,” Scott Greytak, deputy executive director of the advocacy group Transparency International USA, said in a statement. “The core business, income streams and family arrangements would remain largely intact.”
The Clarity Act is the result of years of lobbying by the crypto industry. During the 2024 election, the pro-crypto super PAC spent more than $130 million to elect industry-friendly lawmakers. This spending has paid off. Last July, Mr. Trump signed a pro-crypto bill known as the GENIUS Act that regulates a type of digital currency called a stablecoin. That same month, the House voted to pass a version of the Clarity Act.
The bill soon ran into obstacles in the Senate, including opposition from the banking sector. But in May, a bipartisan group of senators voted for it deposit that from the Senate Banking Committee, a major step.
The legislation now awaits a vote in the full Senate, with just weeks left before the August recess, widely seen as the deadline for Congress to act on the bill before the midterm elections.
Politics is complicated. Republicans hold a slim majority in the Senate, meaning the Clarity Act will require at least some Democratic votes to pass. And Mr. Trump’s cryptocurrency dealings have even industry-friendly Democrats on board.
The ethics language unveiled Wednesday emerged from discussions between Senate Republicans and the White House, which supported the bill. In a statement, a White House official called it “the most comprehensive and far-reaching ethics provision in history” and said the administration was “bent over backwards” to find a solution.
But critics soon pointed to glaring loopholes, which one former regulator called “ridiculous.The bill would prohibit public officials from issuing or sponsoring digital currencies while in government. The rule also applies to spouses — but not children.
The proposed restrictions appear unlikely to limit Mr Trump’s money-making. His two biggest crypto ventures were launched shortly before he became president – in one case just 72 hours before his inauguration.
And the rule would only remain in place until January 2029, meaning a future Justice Department would not be able to prosecute Mr. Trump for potential violations, experts said.
Still, Senate Republicans praised the language as a historic compromise that addressed Democrats’ concerns.
“History will remember this as the moment when the president chose a higher ethical standard than the law required of him,” said Sen. Cynthia Lummis, R-Wyoming, he said on Wednesday.