Senate negotiators struck a compromise on Tuesday over the ethics language that had blocked the Digital Asset Market CLARITY Act for weeks, and Bitcoin jumped from the low $64,000s to nearly $66,872 within hours of the news breaking.
Senators Cynthia Lummis and Bernie Moreno, together with White House crypto adviser Patrick Witt, agreed to shift enforcement of new conflict-of-interest rules from individual state attorneys general to the Department of Justice. That single procedural fix removes the threat of fifty competing state-level interpretations and hands the bill one federal standard, which is exactly what institutional players had been waiting for.
What Held the Bill Up
The CLARITY Act itself assigns primary oversight of spot crypto markets to the CFTC, keeps securities-like tokens under the SEC, sets bankruptcy protections for exchange customer funds, and creates safe harbors for DeFi developers. That framework had broad backing for months. The blockage came from a Democratic demand for guardrails stopping the president, vice president and members of Congress from profiting off personal crypto holdings through their offices. The provision was aimed at Trump, whose 2025 disclosures showed $1.4 billion in crypto-related income tied to World Liberty Financial and a series of personalized memecoins. Moving enforcement to the DOJ broke the deadlock without gutting the clause.
Crypto in America host Eleanor Terrett first reported the agreement Monday night, citing industry sources briefed on the final language. Witt confirmed his involvement hours later, crediting the president and adviser David Sacks.
Republicans still need several Senate Democrats to cross over before a floor vote can happen, and prediction markets lifted their odds on passage while flagging the timeline as tight. Spot Bitcoin ETFs had already logged a multi-day streak of net inflows before the political news landed, which means some of Tuesday's price move was positioning already in place rather than a pure reaction to the Capitol Hill story.
This article is for informational purposes only and does not constitute financial advice. Crypto markets are volatile; always do your own research before making investment decisions.
