The Senate's effort to pass the Clarity Act hit a roadblock as Democrats rejected the White House-backed ethics language concerning President Trump’s potential crypto profits, reopening bipartisan talks for a tougher enforcement plan.
The latest draft, introduced Wednesday, aims to prohibit senior federal officials, including the president, from endorsing or sponsoring digital assets while in office. It places enforcement solely in the hands of the Department of Justice. However, Democrats oppose this exclusive DOJ authority, insisting on broader enforcement powers.
Senator Ruben Gallego criticized the proposal as falling short despite months of bipartisan negotiation, stating the final draft doesn’t reflect the cooperation achieved earlier. The original language was negotiated with Republican Senators Cynthia Lummis and Bernie Moreno, with Lummis calling it the most stringent ethics standards ever proposed for a presidency.
Gallego revealed talks broke down over whether state attorneys general should share enforcement duties. He is now collaborating with Senator Thom Tillis and other Republicans on a counterproposal to present to the White House and Senate negotiators.
Tillis views the current draft as a solid starting point but acknowledges it needs changes to secure the 60 votes required for Senate approval. Lawmakers still plan to meet with the White House to see if further modifications acceptable to Democrats would also pass muster with Trump.
This impasse clouds the future of crypto legislation. Senate Majority Leader John Thune does not expect the bill to pass before the August recess, though he hopes debate can start before then.
