President Donald Trump has agreed to an ethics provision within the Digital Asset Market CLARITY Act, overcoming a major obstacle for the proposed US crypto regulatory framework as it advances toward a Senate vote.
Ethics provision resolves standoff over official crypto holdings
After extended negotiations between senior White House officials and congressional Democrats, parties reached agreement on measures to restrict profit-taking from digital assets by high-ranking federal officials. The ethics rule would apply not only to the president and vice president, but also to legislators and senior government staff.
An industry source familiar with the process reported that this ethics requirement was the final major hurdle holding up the Digital Asset Market CLARITY Act. Resolution followed conversations in mid-July that included President Trump, Republican Senators Bernie Moreno and Cynthia Lummis, and White House cryptocurrency advisor Patrick Witt.
Ethical concerns intensified after recent financial filings revealed Trump had received large sums associated with memecoin projects and World Liberty Financial, a company founded by his family. These disclosures led to increased calls for regulatory guidelines covering public officials’ interactions with digital assets.
World Liberty Financial primarily operates in fintech and investment management. The company has been linked in recent weeks to several digital currency initiatives as well as to financial disclosures involving the Trump family.
Mini dictionary: World Liberty Financial, a US-based company involved in financial services, investment management, and recently in digital assets initiatives.
CLARITY Act to create new federal crypto oversight
The Digital Asset Market CLARITY Act, now entering its final phase of negotiation, would introduce comprehensive federal oversight for the US cryptocurrency market. For the first time, digital asset markets would be regulated under a framework dividing responsibility between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). The CFTC would receive broad new powers over digital asset markets under the bill.
Senators are required to cast their votes before the first week of August. Should the Senate approve the bill, it would return to the House of Representatives for further action before reaching the president for signature. The complete legislative text is expected to be released in the coming days.
| Agency | Existing crypto authority | CLARITY Act role |
|---|---|---|
| SEC | Enforcement of securities laws | Shares digital asset oversight with CFTC |
| CFTC | Regulates commodities and derivatives | Receives expanded digital asset regulatory power |
Democrats secure consumer safeguards in the bill
During the final phase of bargaining, Democratic senators negotiated the inclusion of enhanced consumer protection provisions. These measures aim to prioritize retail investor interests amid the bill’s regulatory reshaping.
Ryan VanGrack, vice chair at Coinbase, stated that the new requirements “center on protecting customers” and described how Democrats used the legislative moment to prioritize consumer interests in the CLARITY Act.
Democratic senators privately met last week to coordinate their approach as the ethics and consumer protection issues converged just before the legislative deadlines. As of Monday evening, the final text of the bill had not yet been published and Senate leadership had not set a date for the floor vote.
A White House official reported that delays in releasing the final bill language might enhance the measure’s prospects for bipartisan support. President Trump has also publicly urged senators to approve the bill following the recent death of Senator Lindsey Graham, who had championed the initiative.
While White House cryptocurrency advisor Patrick Witt prepared to leave on temporary National Guard duty this week, he confirmed that his deployment was postponed. Meanwhile, Witt’s deputy Harry Jung announced plans to step down from his post within the next two weeks.
