Ethics row over Trump crypto wealth threatens US Clarity Act

Senate negotiations over the Digital Asset Market Clarity Act have hit a wall over an ethics provision, with Democrats demanding strict ownership and disclosure bans targeting government officials. The impasse centres on President Donald Trump's recently disclosed $1.4 billion crypto wealth, which lawmakers argue creates an untenable conflict of interest for an administration actively regulating the sector.

Democratic senators, including Chris Murphy, Chris Van Hollen, Jeff Merkley and Kirsten Gillibrand, are pushing to make it illegal for presidents to issue or sponsor digital assets. During a recent briefing, ethics advocates told Senate offices that the bill must restrict officials' family members from holding crypto assets and mandate broad disclosure rules. Earlier bipartisan discussions had explored delaying the implementation of such ethics rules to avoid immediate disruptions to Trump's holdings, but those talks have stalled.

"The time to act is now — and that must include ethics reforms that prohibit members of Congress, the president and their spouses from cashing in on their office," Gillibrand said. She noted that Trump's largest single 2025 income stream was $636 million from issuing a memecoin bearing his name.

The legislation requires 60 votes to pass the Senate, meaning Republican backers need significant Democratic support to send the bill to the floor. A new draft is expected in the coming days, but industry insiders anticipate it will lack finished language on the ethics section. Several Senate Democrats are planning a press conference this week to highlight their opposition, claiming the bill fails to address "growing political corruption" tied to the crypto sector's Washington influence.

For market participants, the delay threatens to prolong the regulatory uncertainty that has kept major institutional capital on the sidelines. This legislative cloud hangs over a market showing signs of renewed activity. Centralised exchange volumes rose in June for the first time in five months, with spot trading climbing 15.3% to $1.11 trillion and real-world asset perpetual volumes surging to a record $311 billion.

Trump has signalled a willingness to make an exception to his recent vow to block all legislation until a voter identification bill advances. Senate Majority Leader John Thune has indicated he will press forward with a vote this month regardless of the bill's final shape. White House crypto advisor Patrick Witt called this a "critical week" for the legislation, noting it marks the one-year anniversary of the industry's first major stablecoin bill.