Senators said to hatch idea to toughen Trump's concession on Clarity Act's crypto limits

Two U.S. senators, Republican Thom Tillis and Democrat Ruben Gallego, have reportedly finalized a bipartisan compromise to address the ethics provisions of the Digital Asset Market Clarity Act, specifically relating to conflicts of interest for senior government officials in the cryptocurrency sector. This section aims to ban senior government officials from having direct ties to crypto projects, a provision seen as directly affecting former President Donald Trump’s crypto business empire. Trump has recently signaled willingness to accept a narrower version of this ethics limitation, which some Democrats criticize as insufficiently stringent and potentially unenforceable under a Department of Justice led by Trump appointees.

The revised ethics language, while confirmed to have been agreed upon by Tillis and Gallego, has not yet been publicly shared or officially endorsed by the White House and key Democratic lawmakers. The Act faces a tight timeline before the Senate’s August recess, with only about seven days remaining to navigate the complex Senate floor procedures required for a vote. Senate Majority Leader John Thune has expressed cautious optimism about a potential cloture motion—necessary to proceed to voting—but underscored skepticism given Democratic reservations.

Beyond the ethics component, the Clarity Act’s contentious provisions include illicit finance protections relevant to decentralized finance (DeFi) and a continuing debate over stablecoin rewards programs, with banking interests pressing for stronger prohibitions on stablecoin interest-like payouts. Despite months of negotiation and compromises, these issues remain unresolved, with Democratic opposition persisting on some fronts. The White House crypto adviser, Patrick Witt, has publicly voiced frustration over stalling negotiations, particularly regarding illicit finance and stablecoin yield restrictions.

If the bill does not advance before the Senate’s recess on August 7, many in the crypto industry and political observers anticipate a renewed effort in September, when the Senate returns for a brief session before the midterm elections. The bill’s ultimate fate may hinge on the November election outcomes, since a shift in congressional control could influence willingness to revisit or revise the legislation. Meanwhile, industry leaders, such as Coinbase CEO Brian Armstrong, remain hopeful that clear regulatory rules are imminent, though acknowledgment is growing that significant hurdles remain before the Clarity Act can become law this year.