Attempts to pass the CLARITY Act, intended to establish a regulatory framework for the US crypto market, have stalled due to political disagreements. A recent compromise led by Donald Trump, which aimed to address ethical concerns for political officials holding cryptocurrencies, failed to secure enough support for a vote.

On July 20, Trump officially endorsed a revised ethics clause restricting presidents, vice-presidents, members of Congress, and senior federal officials from certain crypto activities during their term. The amendment was negotiated earlier that week with key senators and the White House crypto advisor, and was described by Republicans as the "most full and broadest ethical provision in history." Senator Bernie Moreno claimed it was the strictest ethical text ever included in a Congressional bill.

Contentious Points in the Ethics Provision

The clause targets limits on acquiring, destroying, trading, or profiting from cryptocurrencies by high-ranking officials. Despite this, opposition remains strong from Democrats. Senator Ruben Gallego criticized the White House proposal as "very weak." Senator Cory Booker emphasized the necessity of a genuine bipartisan agreement to advance the legislation.

Another major point of conflict involves the oversight authority. Democrats object to delegating ethical supervision to the Department of Justice, especially as Donald Trump’s lawyer Todd Blanche is under consideration to lead that department.

Financial Disclosures Fuel Debate

The intensity of the dispute is heightened by revelations about Trump’s crypto earnings. Public disclosures on July 1 showed he earned nearly $1.4 billion in crypto-related income in 2025, largely through his company World Liberty Financial and a memecoin bearing his likeness. This financial backdrop adds complexity to the ongoing debate over ethical governance and regulatory oversight.

The political clash has now extended beyond typical financial regulation into broader ethical rules for officials, causing further delays to the reform. The industry continues to await a resolution that would provide clearer guidelines for digital asset markets.

This material is for informational purposes and does not constitute financial advice.