US Senate Crypto Market Structure Bill Snags on Fight Over Ethics Enforcement

The Clarity Act, a US crypto market structure bill, is facing delays in the Senate as Democrats and Republicans remain at odds over who should enforce its ethics provisions.

CoinDesk reported on July 21 that Democrats are insisting state attorneys general should enforce ethics rules that would restrict federal officials from holding digital assets. The White House and Republicans want that authority vested in the US attorney general instead.

The provision would bar senior government officials from involvement in crypto businesses, including the president, vice president and all members of Congress. Democrats favor state attorneys general because they worry the Justice Department is subject to presidential influence. Todd Blanche, President Donald Trump's former personal lawyer, has been nominated for attorney general.

Trump previously said he had agreed to what he called the "most comprehensive and broadest ethics provisions in history." But the specific language has yet to be shared with Democrats, CoinDesk reported. Trump and his family are closely tied to several crypto ventures, including a stake in World Liberty Financial, raising potential conflict-of-interest concerns if the ethics provision is applied.

The timeline for the bill is also tight. Aug. 7, the final day before the Senate's summer recess, is effectively being discussed as the last chance to pass the measure this year. The crypto industry expects the bill to reach the Senate floor as early as the start of next week, matching a timetable previously signaled by Senate Majority Leader John Thune. A final vote could still take several more days.

Even if the bill passes the Senate, it would still need approval from the House after lawmakers return in September. Divisions among House Republicans have recently disrupted other legislation and remain a potential obstacle. Some Democratic lawmakers are also discussing adding policy on prediction markets to the bill, a move that could further complicate negotiations.