Trump’s Crypto Profits Complicate
Senate Passage of Landmark Clarity Act
Democrats and Republicans are haggling about
the Clarity Act, a major bill pushed by the crypto industry, as it moves closer
to a Senate vote.
·
Senate
Nears Vote: The U.S.
Senate is expected to vote on the bipartisan Clarity Act, a landmark
cryptocurrency market-structure bill, before the August recess.
·
Trump's
Crypto Earnings Spark Controversy: Debate over the bill has intensified following President Donald Trump's
disclosure of $1.4 billion in crypto-related income (and over $2
billion in total income) during the first year of his second term.
·
Democrats
Seek Ethics Safeguards: Senate
Democrats are demanding stronger ethics provisions that would prohibit public
officials from issuing, sponsoring or profiting from cryptocurrencies while in
office.
·
Republican
Draft Includes Restrictions: A
revised Republican draft bars the President and other federal officials from
issuing or sponsoring digital currencies during their tenure.
·
Critics
Call Provisions Inadequate:
Democrats and ethics watchdogs argue the draft contains major loopholes and
would not prevent Trump from continuing to profit from his existing crypto
businesses or memecoin.
·
Trump's
Existing Ventures Unaffected: Since
Trump's major crypto ventures were launched before he took office, experts say
the proposed restrictions would not apply to those businesses.
·
Limited
Scope of Restrictions:
o
Applies
only while officials are in office.
o
Covers
spouses but not children.
o
Expires
in January 2029, limiting future enforcement.
·
Crypto
Industry Supports the Bill: The
cryptocurrency industry strongly backs the Clarity Act because it would provide
regulatory certainty after years of stricter enforcement under the Biden
administration.
·
Reversal
of Biden-Era Policy: The
Trump administration has withdrawn most SEC lawsuits against crypto firms, and
the Clarity Act would largely codify this more industry-friendly regulatory
approach.
·
Industry
Lobbying Played Major Role:
Crypto-backed political action committees spent over $130 million during
the 2024 elections to help elect pro-crypto lawmakers.
·
Previous
Legislative Success: Trump
signed the GENIUS Act, regulating stablecoins, in July, while the House
also approved its version of the Clarity Act.
·
Senate
Timeline: The bill
has cleared the Senate Banking Committee and now awaits a full Senate vote,
with passage before the August recess viewed as critical ahead of the midterm
elections.
·
Need for
Bipartisan Support:
Republicans' narrow Senate majority means Democratic votes will be necessary,
making ethics concerns central to the bill's prospects.
·
Industry
View: Crypto
industry representatives acknowledge that Trump's crypto activities have become
the principal obstacle to securing bipartisan support.
·
White
House Position: The
White House describes the proposed ethics provisions as the "most
comprehensive and wide-ranging ethics provision in history," saying
the administration worked extensively to address Democratic concerns.
·
Republican
Response: Senator
Cynthia Lummis defended the compromise, arguing it demonstrates President
Trump's willingness to adopt ethical standards beyond those legally required.
A
sweeping cryptocurrency bill is approaching a final vote in the Senate this summer,
with support from Republicans and some Democrats — and backed by an industry that
has spent tens of millions of dollars to shape it.
But
lately a major sticking point has emerged: the $1.4 billion in crypto revenue that
President Trump disclosed in June, after a year of astonishing moneymaking by his
family’s network of crypto businesses.
Now
as the landmark legislation, known as the Clarity Act, inches toward passage, Senate
Democrats are pushing for strict language in the bill that would bar public officials
from selling digital currencies. On Wednesday, Republican senators released a new
draft of the bill that contained a version of those restrictions, including language
making it illegal for the president and other U.S. officials to issue or sponsor
a cryptocurrency.
Democrats
and progressive advocacy groups immediately fired back, arguing that the draft did
not go far enough to stop Mr. Trump from using crypto to enrich himself. With the
midterm elections approaching, the debate is threatening to engulf the Clarity Act,
showing how Mr. Trump’s crypto dealings have rippled through Washington.
The
ethics issue has “become the linchpin of whether this gets bipartisan support,”
said Cody Carbone, the chief executive of the Digital Chamber, a crypto trade group.
“Democrats have made this the most important issue for them.”
Passage
of the Clarity Act is a top priority for the crypto industry. Under the Biden administration,
the Securities and Exchange Commission pursued an aggressive enforcement campaign
against crypto firms, filing lawsuits that argued that digital coins should be regulated
like stocks and bonds. The Trump administration reversed course and dropped almost
all of those suits.
The
act, which passed the House of Representatives last year, would effectively lock
that policy position into law so that crypto companies can operate freely in the
United States without fear of a regulatory crackdown from a future administration.
Democrats
have voiced concerns about the bill for months, pointing out that it would give
authority over the industry to a short-staffed federal agency that has limited enforcement
capacity.
But
no issue has attracted more scrutiny than Mr. Trump’s crypto ventures. Last month,
the president issued his mandatory financial disclosure report, which showed that
he had made more than $2 billion during the first year of his second term, most
of it from crypto.
Those
gains came at the expense of ordinary investors, who lost a total of $3.8 billion
after buying Mr. Trump’s so-called memecoin, a novelty
cryptocurrency known for its volatility.
Nothing
in the latest draft of the Clarity Act would prevent Mr. Trump from continuing to
profit from his memecoin or other crypto ventures, according
to Democratic staff and other industry experts who reviewed the language.
“The
Senate majority released a bill that would do effectively nothing to stop the main
ways he made that money — or could keep making it,” Scott Greytak, deputy executive
director of the advocacy group Transparency International U.S., said in a statement.
“It would leave the underlying businesses, revenue streams and family arrangements
largely untouched.”
The
Clarity Act is the result of years of lobbying by the crypto industry. During the
2024 election, a network of pro-crypto super PACs spent more than $130 million to
elect industry-friendly legislators. That spending has paid off. Last July, Mr.
Trump signed a pro-crypto bill known as the GENIUS Act, which governs a type of
digital currency called a stablecoin. The same month, the House voted to pass a
version of the Clarity Act.
The
bill soon ran into obstacles in the Senate, including pushback from the banking
industry. But in May, a bipartisan group of senators voted to advance it from the
Senate Banking Committee, a crucial step.
Now
the legislation awaits a vote in the full Senate, with only weeks to go until the
August recess, which is widely seen as the deadline for Congress to act on the bill
before the midterm elections.
The
politics are complicated. Republicans hold a thin majority in the Senate, meaning
the Clarity Act will require at least some Democratic votes to pass. And Mr. Trump’s
crypto dealmaking has prompted even industry-friendly Democrats to dig in.
The
ethics language unveiled on Wednesday emerged from discussions between Senate Republicans
and the White House, which has supported the bill. In a statement, a White House
official called it “the most comprehensive and wide-ranging ethics provision in
history” and said the administration had “bent over backward” to find a solution.
But
critics soon pointed out apparent loopholes, which one former regulator called “laughable.”
The bill would bar public officials from issuing or sponsoring digital currencies
while they were in government. The rule also applies to spouses — but not to children.
The
proposed restrictions appear unlikely to curb Mr. Trump’s moneymaking. His two largest
crypto ventures were started shortly before he became president — in one case, a
mere 72 hours before his inauguration.
And
the rule would stay in effect only until January 2029, meaning that a future Justice
Department would be unable to prosecute Mr. Trump for potential violations, experts
said.
Still,
Senate Republicans praised the language as a historic compromise that addressed
concerns from Democrats.
“History
will remember this as the moment a president chose a higher standard of ethics than
the law required of him,” Senator Cynthia Lummis, Republican of Wyoming, said on
Wednesday (22.07.2026).