Ethics Fight Over Trump’s Crypto Could Stall Clarity Act

President Donald Trump’s expanding crypto holdings and family business ties have focused attention on whether the Clarity Act should include conflict-of-interest limits for top officials and their relatives before the bill reaches the Senate floor.

The Clarity Act would set federal rules for digital assets, assign primary jurisdiction between the Commodity Futures Trading Commission and the Securities and Exchange Commission, and impose disclosure requirements. The bill advanced out of the Senate Banking Committee this month and now must be reconciled with the Senate Agriculture Committee before a full Senate vote. Passage in the Senate would require 60 votes.

Several Democrats on the Banking Committee made support conditional on added ethics language. Senator Angela Alsobrooks insisted a bipartisan floor vote would require an agreement that “would apply not just to the President and Vice President but to all of us.” Senator Ruben Gallego also voted to advance the measure while pressing for ethics provisions.

Critics point to Mr. Trump’s personal crypto ventures as the source of the push for guardrails. The president has been associated with a memecoin that raised millions and with other family-linked crypto projects. Industry estimates place family-related crypto revenue in the hundreds of millions to roughly $1.4 billion since his inauguration.

Industry groups and some policy advisers have been cautious in public comments about whether those ties are affecting the bill’s progress. Mark Hays, a senior policy analyst at a consumer advocacy group focused on financial regulation, observed that many industry voices avoid addressing the president’s interests directly.

Republican supporters say the Clarity Act would create lasting regulatory certainty, encourage institutional investment and protect consumers. Senate Banking Committee Chairman Tim Scott described the bill as a path to establishing clear rules and fostering domestic crypto innovation.

Other issues complicate negotiations. Banks lobbied against language that would permit crypto platforms to pay rewards on stablecoin deposits. Federal regulators have issued positions on digital assets recently, but backers say agency actions lack the permanence of statute.

Reeve Collins, co-founder of a crypto firm, noted political turbulence around the president and said it may be slowing legislative progress on crypto measures.

Analysts say the bill’s prospects depend on whether negotiators can bridge divisions over conflicts-of-interest language. Jaret Seiberg, a Washington research director, warned it is politically difficult for Democratic senators to back a crypto bill unless standards restricting presidential involvement are included. Nic Puckrin, CEO of a crypto information service, observed that winning enough Democratic votes without ethics provisions will be challenging.

A Senate staff member involved in the discussions cautioned that failure to reach an ethics compromise could leave responsibility for the bill’s fate with Republicans who control the Senate.

The House passed its version of the Clarity Act earlier this year without notable ethics language. Negotiators in both chambers now face a narrow window to resolve differences before the midterm-election calendar and heightened political scrutiny further constrain options.