For months, lawmakers have believed they’re on the verge of passing the first major framework for regulating cryptocurrency. But as the Senate races to finish before its August recess, a long-running bipartisan effort is running into a familiar political fight: President Donald Trump’s finances.
The Digital Asset Market Clarity Act — shorthanded as the “Clarity Act” on Capitol Hill — would establish a federal framework for the crypto industry, clarifying which government agencies oversee which digital assets, creating rules for crypto exchanges and imposing ethics restrictions on government involvement in digital assets.
With just hours to go before lawmakers left Washington for a month, senators found themselves scrambling late Thursday to close nearly a year of negotiations — or to block the bill — after the House first passed the legislation last July.
“We need to vote on the cryptocurrency bill, which we’ve spent years on, and if we’re waiting to take those votes to get a consensus, it’s not going to happen,” Sen. John Kennedy, R-La. said.
But for a growing bloc of Democrats, the urgency is the problem.
Democrats argue the bill in its current form falls short on a number of areas, including a White House-backed ethics provision that bans all federal officials from issuing or sponsoring new digital assets, while exempting existing ones — including cryptocoins held by Trump and his family.
Trump made over $1.4 billion from cryptocurrency-related income in 2025, according to his annual financial disclosure released at the end of June. According to the disclosures, Trump pocketed more than $500 million from World Liberty Financial, a cryptocurrency company he co-founded with his children, Donald Trump Jr. and Eric Trump, and another $635 million connected to sales of his $TRUMP meme coin.
The self-enrichment concerns intensified last week when a group of Senate Democrats — including Richard Blumenthal, D-Conn., and Chris Van Hollen, D-Md. — held a forum on what they called Trump’s “crypto corruption.” The Democrats argued that the president has dramatically and personally profited from the industry since returning to office, and that the Clarity Act, as currently written, would do little to curb that conduct.
“It would expose the financial future of millions of Americans to unacceptable volatility and risk, while giving crypto billionaires a free pass on the basic consumer protections that banks and other financial institutions are required to follow,” Blumenthal said at the forum.
Van Hollen argued the urgency around the bill has less to do with public demand than with the crypto industry’s political influence, pointing to the hundreds of millions of dollars the crypto industry has funneled into backing favorable candidates.
“I can tell you, our phones are not ringing off the hook from constituents saying you got to pass the Clarity Act,” Van Hollen said. “They’re talking about rising prices. They’re talking about the illegal war in Iran. They’re talking about a lot of things, but they’re not talking about passing the Clarity Act.”
Democrats are actively blocking the bill until the legislation addresses Trump’s crypto windfall. They want language added to the measure that would force the president to divest from his crypto holdings, though, interestingly, Democrats would also allow Trump to cash out without paying capital gains.
While it’s the sort of proposal that Trump himself may not hate, there was enough disagreement Thursday night that senators weren’t able to reach a deal on the measure — with lawmakers now expecting to leave Washington for a month without voting on the bill.
Democrats say they need tighter restrictions on Trump if they’re going to support the legislation, particularly given the president’s active stakes in the industry.
But Republicans reject the idea that the current bill lets Trump off the hook. Sen. Cynthia Lummis, R-Wyo., the bill’s lead champion in the Senate, has argued Democrats are ignoring concessions the White House has already made.
“The president agreed to an ethics provision that no president has ever agreed to,” Lummis said on Fox Business Wednesday. “He’s gone farther to protect ethics than any president in history. Yet the Democrats do want more.”
Still, the pressure for the Senate to move on the Clarity Act is coming from more than just within the chamber.
The crypto industry and the White House itself have leaned on lawmakers to close out the bill before recess, with Treasury Secretary Scott Bessent directly exerting pressure.
“It’s disappointing — but not surprising — that Senate Democrats are choosing politics on the cusp of a major victory for American leadership,” Bessent said in an X post last week.
Influential leaders in the crypto industry like Coinbase CEO Brian Armstrong have also been applying the pressure, too.
“At this point, the only thing left isn’t negotiation—it’s whether some group will try to stall or block legislation that already has broad bipartisan support,” Armstrong said in a post on X.
Some Democrats still have hope that negotiations with Republicans can deliver a bipartisan product that has strong regulations and consumer protections for crypto. But after Republicans released new text in July following the latest round of talks, a group of Democratic senators said it still fell short on a number of issues. They said they would continue working to find a solution.
While Democrats say the current language doesn’t do enough to address Trump, Democrats are also concerned the bill doesn’t do enough on enforcement.
As written, only the Department of Justice can bring legal action on government officials violating the law by sponsoring or issuing assets. Many Democrats say they don’t trust the DOJ to properly enforce the provision — particularly the allegations against Trump. They want state attorneys general to have enforcement power as well.
Sen. Angela Alsobrooks, D-Md., who supported the bill in the Senate Banking Committee in May, said she now won’t vote for the legislation unless states are given the power to prosecute.
“That’s what we put forward as a point of negotiation,” Alsobrooks said, adding that the state enforcement power wasn’t something she would compromise on.
Of course, even as senators reached an impasse, there were some small signs of progress this week. Sen. Thom Tillis, R-N.C. told reporters his office was working with the White House and Sen. Ruben Gallego, D-Ariz., on a bipartisan ethics counterproposal. But by Thursday, Tillis suggested a breakthrough wasn’t exactly imminent.
When asked by Punchbowl News whether the White House had responded to the new language, Tillis said the administration hadn’t.
“Hopefully we’ll hear back,” Tillis said.
But again, the issues extend beyond ethics and enforcement. Some banks have also said they’re concerned certain regulations could lead to customers pulling their deposits. Those concerns have prompted Republican Sens. Josh Hawley of Missouri and Jerry Moran of Kansas to become the first Republicans to say they oppose the bill.
By Thursday night, it was clear there were a number of outstanding issues and Senate leaders weren’t going to quickly resolve all the problems.
Still, supporters are escalating their lobbying efforts, arguing that failure to pass the bill could imperil the cryptocurrency industry in the United States.
“There’s no way that we can allow the United States to fall behind in the digital assets arena,” Sen. Bill Haggerty, R-Tenn. said on Fox Business Tuesday. “Everything is moving digital around the world.”
For many Democrats, however, that argument isn’t holding water.
“I don’t even know what that means,” Sen. Elizabeth Warren, D-Mass., said when asked if she was worried about crypto leaving the U.S. “You mean that they will do their money laundering overseas?”
Warren said Congress needed to do its job to regulate the industry and make sure “our citizens don’t get cheated.”
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