Senate negotiations over the Clarity Act have narrowed around an ethics dispute tied to President Donald Trump’s cryptocurrency business interests, threatening the bill’s chances of receiving a vote before lawmakers leave for the Aug. 7 recess.
Sen. Thom Tillis, a North Carolina Republican, and Sen. Ruben Gallego, an Arizona Democrat, sent a revised ethics compromise to the White House on Thursday morning, according to a source familiar with the talks. The contents were not disclosed, and the White House did not immediately respond to a request for comment.
The proposal arrives as the Senate remains short of the 60 votes required to advance the market-structure legislation. Senate Democrats have made an ethics provision a condition for supporting the bill, arguing that rules governing digital-asset markets should address the financial interests of public officials who could influence those rules.
Trump’s crypto holdings have become the central obstacle. The president launched a memecoin shortly before his inauguration, while his family has also been involved with World Liberty Financial, a cryptocurrency venture known as WLF. Financial disclosures released last month reported that Trump received millions of dollars connected to WLF. The supplied account also cites July 2026 financial forms showing more than $550 million in token-sale income.
A narrower ban remains under discussion
A draft ethics measure released last week with Trump’s approval would prohibit public officials and their spouses from issuing or sponsoring digital assets. It would not cover other relatives, leaving questions over businesses operated by adult children or family-affiliated entities.
The draft assigns enforcement to the Justice Department and would expire in January 2029. That structure has drawn scrutiny because enforcement during Trump’s current term would fall under the attorney general, currently acting Attorney General Todd Blanche, who previously served as Trump’s personal attorney.
The dispute is therefore about more than whether an ethics clause appears in the final bill. It also concerns the scope of prohibited activity, the family members covered, the agency responsible for enforcement, and whether the rules would remain in effect after the next presidential transition.
Democrats have sought language that more directly addresses Trump-linked ventures. Some Republicans have also expressed reservations, making it difficult for party leaders to treat the issue as a purely partisan fight.
Senate calendar leaves little room
Senate Majority Leader John Thune said this week that the Clarity Act remains among the chamber’s priorities, though government funding and a package of nominations are competing for limited floor time. Speaking on Fox News on Tuesday, Thune said the process could start with a procedural vote.
A procedural step would test whether supporters can assemble 60 votes, but it would not resolve the underlying ethics dispute. With the planned August recess approaching, negotiators face pressure to either produce language acceptable to both parties or accept that the bill may slip into a later legislative window.
The Clarity Act is intended to establish clearer federal rules for cryptocurrency markets, including the division of oversight between regulators. Its proponents argue that companies need a more predictable framework for determining whether digital assets are commodities, securities, or subject to another category of regulation.
That objective has been overshadowed by the political challenge created when a sitting president and his family have substantial financial exposure to the sector being regulated. A bill designed to define market rules now depends partly on whether senators can agree on safeguards for the people writing and enforcing those rules.
Stablecoin rewards add another fault line
The ethics fight is not the only issue delaying an agreement. Brendan Pedersen, a reporter at Punchbowl News, reported Thursday that lawmakers are also raising concerns about stablecoin rewards, arrangements that allow users to earn returns on funds held in stablecoin accounts.
The issue sits near the boundary between crypto products and traditional banking. Banks and some policymakers have argued that payment stablecoins offering yield-like rewards could compete with deposits while operating under a different regulatory model. Crypto advocates counter that restrictions could limit consumer choice and prevent U.S.-based firms from competing with overseas platforms.
Treasury Secretary Scott Bessent blamed Senate Democrats for the stalled legislative effort in a Thursday post on X. Democrats, meanwhile, have maintained that market-structure legislation cannot proceed without enforceable conflict-of-interest protections.
Neither side has publicly described the Tillis-Gallego compromise, leaving unclear whether it changes the list of covered officials, expands the rules to family members, alters the enforcement mechanism, or revises the 2029 sunset date.
Delays extend the regulatory gap
The Crypto Council for Innovation said Thursday that jurisdictions including the European Union have already established clearer cryptocurrency frameworks, while most centralized exchange trading takes place outside the United States. The European Union’s Markets in Crypto-Assets regulation has provided a licensing and compliance framework across its member states, offering firms a clearer route to operating in a large market.
The United States has developed rules through a mix of agency actions, enforcement cases, state-level requirements, and legislation covering narrower areas such as stablecoins. The absence of a comprehensive market-structure law has left many companies navigating overlapping claims from the Securities and Exchange Commission and Commodity Futures Trading Commission.
The supplied account also cited a 25-month low in global centralized-platform spot trading volume, at $951.8 billion, and said Binance held more than 26% of global market share. Those market figures do not change the immediate Senate arithmetic, but they underline the international setting in which the legislation is being debated: large trading venues and regulatory frameworks outside the United States remain influential while Washington struggles to reach agreement.
Prediction market Polymarket currently places a 30% chance on the Clarity Act becoming law by the end of the year, according to the supplied material. The Senate’s next procedural moves, and whether the White House accepts or counters the Tillis-Gallego proposal, will determine whether that estimate improves before the chamber leaves for recess.
For deeper context on regulation and Trump-linked tokens, explore this Trump & Melania token insight and its market implications.
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