Democratic Senator Says CLARITY Act Can Still Pass, but Ethics Deal Is Key

Sen. Ruben Gallego, a key Democratic negotiator on the CLARITY Act, the US crypto market structure bill, said the measure can still pass but needs an agreement with the White House on ethics provisions.

The Block reported on August 19 that Gallego struck an optimistic tone on the talks at the SALT conference in Wyoming. “We can still land this plane,” he said.

Still, negotiations over ethics provisions tied to President Donald Trump’s crypto businesses have shown little progress. Gallego said the White House has repeatedly received proposals but either sent back responses with no substance, offered answers that were worse than before, or failed to respond at all.

The ethics language has emerged as the final major hurdle to passing the CLARITY Act. As Trump’s crypto holdings and related business interests have expanded, restrictions on conflicts of interest involving public officials have become a central issue in the negotiations.

Trump agreed in July to an ethics provision barring public officials, government employees and their spouses from directly issuing or sponsoring digital assets. The measure gives enforcement authority to the Department of Justice, not state attorneys general, and includes a sunset clause that expires in January 2029. Democrats have criticized it as too weak.

Trump is now reviewing a new compromise proposal drafted by Gallego and Republican Sen. Thom Tillis. The proposal would bar public officials and their spouses from issuing or sponsoring digital assets while also giving state attorneys general authority to enforce the provision.

Gallego said the CLARITY Act will need 60 votes to clear the Senate. “To get 60 votes, you need a good ethics bill, and we also have to wrap up the other issues that are still outstanding,” he said. Other unresolved issues include the scope of permitted stablecoin rewards and how strict rules should be to prevent illicit financial activity.

Time is short. Senate Majority Leader John Thune is scheduled to hold the first procedural vote on the CLARITY Act on September 15, after Congress returns from its August recess.

Gallego added that some on both the left and the right do not want to finish negotiations because they want to keep the bill alive as a political issue. But others, he said, want to govern, finish the legislation and ensure the US can continue to innovate in the sector.