CLARITY Act: Trump, the first obstacle to his own crypto law

The CLARITY Act is the number-one priority of the US crypto industry, the text meant to divide the regulation of digital assets cleanly between the SEC and the CFTC. It has cleared its Senate committee, it is on the calendar, the White House is pushing it. And yet it could fail for a reason few had anticipated: its biggest obstacle is neither a banking lobby nor a technical disagreement, it is the president himself. The provision Democrats demand in exchange for their votes directly targets the crypto interests of Donald Trump and his family, and the administration refuses any text that singles him out.

Update 21 July 2026. The obstacle described here has just been lifted in principle. On the evening of 20 July, Donald Trump agreed to an ethics clause in the CLARITY Act, with the White House sending the language to Senate Republicans. Three days earlier, the Senate’s merged draft had come out without that clause, drawing public opposition from Senators Murphy, Van Hollen and Merkley. The final text is not yet public and Democrats have not seen it; about ten session days remain before the 7 August recess. We devote a dedicated article to this endgame and its dated scenarios: Trump concedes on ethics, the August countdown begins.

Update 7 July 2026. Since this article was published, the file has become better documented. The Office of Government Ethics published on 30 June 2026 Donald Trump’s certified 2025 annual report. The official file mentions a 45-day extension and late fees for transactions that had not previously been disclosed on 278-T forms; it also lists, within CIC Digital LLC, $635,068,835 in royalties tied to Celebration Coins. MarketWatch notes that this 927-page filing is nearly four times longer than the previous one.

In the same sequence, The New Yorker aggregates the report to more than $2.2bn of income declared in 2025, of which more than $1.4bn is associated with tokens or crypto investments. The Wall Street Journal reports that Democratic senators are calling for hearings into a secret $500m investment in World Liberty Financial from a group led by a senior Emirati official. The White House disputes the conflict: Business Insider quotes Anna Kelly, according to whom the president’s assets are managed by independent third-party institutions. Methodologically, this update does not replace the original article; it adds a primary, dated piece to the same diagnosis: the ethics clause is no longer merely a bargaining argument, it now bears on income declared in a public filing.

The Digital Asset Market Clarity Act organises a division of authority: the CFTC would gain jurisdiction over the spot markets of digital commodity assets, such as bitcoin, while the SEC would keep assets deemed investment contracts. This legal clarity is the holy grail of a sector that considers it indispensable after years of regulation by enforcement, in the continuity of the GENIUS Act on stablecoins. The problem is not in the architecture of the text, it is in one line that still does not appear in it.

The 60-vote wall

The text has genuinely advanced. The House passed its version, H.R. 3633, on 17 July 2025. The Senate Banking Committee passed its own on 14 May 2026 by 15 votes to 9, the thirteen Republicans joined by only two Democrats, who immediately warned that their committee vote was no commitment on the floor. On 1 June 2026, the text was placed on the Senate calendar under number 423.

Then comes the wall. On the floor, 60 votes are needed to break the filibuster, so at least seven Democrats joining the fifty-three Republicans. Yet Senator Kirsten Gillibrand, though crypto-friendly, set a public condition: no ethics provision, no Democratic votes.

An ethics clause tailored to Trump

The provision in question would bar senior public officials from holding personal interests in the crypto industry they regulate. Its genesis is explicit: it was born of the president’s crypto activities. In committee, an ethics amendment from Senator Chris Van Hollen, which targeted the president and vice president, was rejected by 13 votes to 11, on party lines. Republicans argued that ethics was outside the text’s scope and could be added later on the floor; Democrats reply that deferring it means burying it.

The White House holds a clear line. Its crypto adviser, Patrick Witt, repeats that a rule applying “to everyone”, from the president to the last Capitol intern, would be acceptable, but that any wording targeting a specific office would be rejected. The formula is clever: a general rule with a long transition period might never force the president to divest his positions. The paradox is complete: the man whose administration carries the text is also the one whose interests block its passage.

The scale of the stakes, in numbers

The amounts explain the tension. According to a Reuters investigation, the crypto ventures tied to the president generated about $2.3bn in pre-tax revenue between November 2024 and April 2026. Senator Jamie Raskin’s report, published in November 2025, values the family’s crypto holdings at up to $11.6bn. At the heart of the setup is World Liberty Financial, which passes a large share of token-sale proceeds to the family, complemented by the memecoin bearing the president’s likeness. Reuters underlines the zero-sum nature of the operation: the family’s gains face about $2.25bn of net losses on the retail-investor side, a mechanic dissected in our analysis of the “presidential scam”.

These ventures are, moreover, interlaced with foreign capital, linked to Gulf states and to actors under surveillance, which raises the ethics debate to the level of national security, something the White House refuses to see named.

The other obstacles, quite real

The conflict of interest is the main bone, but not the only one. The Banking Committee text must first be merged with that of the Agriculture Committee, which handles the CFTC’s powers, a merger still disputed. The question of yield on stablecoins, long explosive, seems settled by compromise. Above all, time is short: the realistic window closes on the August recess, beyond which the midterm campaign absorbs everything, and the text could require up to a week of floor time against budget priorities.

An open call

Analysts do not settle it. The investment firm Galaxy puts the chances of passage in 2026 at roughly 50-50, owing not to a single hard point but to the number of questions to resolve in sequence under calendar pressure. The negotiators say they are 80 to 85% aligned on substance, which leaves ethics as the only decisive variable. The irony deserves to be stated plainly. If the text passes without a safeguard, it enshrines a president active in an industry he regulates. If it includes a real safeguard, it might never receive the presidential signature. Between the two, an “everyone” wording paired with a long grace period would offer a political exit, at the price of a compromise the firmest Democrats deem cosmetic. The fate of the CLARITY Act, the priority of an entire sector, depends on a trade-off that the law’s chief beneficiary is also best placed to make fail.

---

Primary sources for the original article: Senate Banking Committee (14 May 2026 release, 15-9 passage); Congress.gov, H.R. 3633, 119th Congress; CoinDesk (markup sequence, amendments, calendar, May and June 2026); Fortune and Elliptic (markup and Van Hollen amendment); Reuters (Trump family crypto revenue estimated at $2.3bn, investor losses at $2.25bn, May 2026); report by Senator Jamie Raskin, House Judiciary Committee Democrats, “Trump, Crypto, and a New Age of Corruption” (25 November 2025); Public Citizen (entanglement with Binance and foreign interests, May 2026); Galaxy Research and Astraea Law (forecasts). Figures and dates were verified one by one.

Sources for the 7 July 2026 update: Office of Government Ethics, publication of the certified 2025 annual report; Donald Trump’s OGE 278e report; MarketWatch, 1 July 2026; The New Yorker, 2 July 2026; Wall Street Journal, 1 July 2026; Business Insider, 3 July 2026.