The Senate is set to vote Tuesday on the Clarity Act, a sweeping cryptocurrency bill that could mark a watershed moment for the $2.3 trillion digital assets market — but its fate hinges on whether President Donald Trump's late concessions on ethics provisions go far enough to satisfy key Democrats.
The bill's lead author, Sen. Cynthia Lummis, R-Wyo., framed the vote in stark terms. «A vote against the Clarity Act isn't a principled stand against President Trump,» she told The Associated Press. «It's a vote against implementing tough restrictions on politicians for crypto investments.»
The legislation has been complicated by Trump's own crypto wealth, amassed while in office. Lummis and Sen. Bernie Moreno, R-Ohio, met with Trump at the White House in mid-July and told him he would have to accept conflict-of-interest restrictions to win Democratic support. According to two people with knowledge of the private discussion, the president agreed with surprisingly little pushback.
The language presented at that meeting would bar all federally elected officials, their spouses, and federal judges from issuing digital assets. That would prevent Trump from sponsoring the type of meme coin he launched on the cusp of his second inauguration in January, and would also apply to first lady Melania Trump, who has her own token.
Sen. Ruben Gallego, D-Ariz., and Sen. Thom Tillis, R-N.C., then proposed a tougher measure: requiring the president to place his crypto holdings in a blind trust and divest when they reach a certain value. It would also empower state attorneys general to enforce the law alongside the Justice Department — a critical provision for Democrats who say they cannot trust a Trump-appointed attorney general to pursue conflict-of-interest violations against the president.
That proposal could, in theory, force Trump to divest from ventures such as World Liberty Financial, the crypto venture his sons launched in 2024. Trump reported more than $500 million in revenue from World Liberty Financial sales of crypto products, including governance tokens, in his annual disclosure report filed with the Office of Government Ethics — a significant share of the more than $1.4 billion he reported from crypto businesses last year.
White House officials initially raised concerns about giving state attorneys general enforcement power, arguing Democratic state lawyers could use it as a political weapon against the president and other Republicans, and that Republican attorneys general could target elected Democrats. But Trump ultimately agreed to language that includes a «meaningful role» for state attorneys general, according to a Sunday night statement from Lummis and Sens. John Boozman, R-Ark., and Tim Scott, R-S.C., the bill's main authors.
A senior GOP aide, briefing reporters on condition of anonymity, said the president had agreed to «about 80%» of the Tillis-Gallego proposal, pointing mainly to the state attorneys general provision. The updated bill released Sunday also requires divestment or a blind trust for any «significant» financial interest in an entity that issues cryptocurrencies, and would allow state attorneys general to sue a crypto exchange if it lists a digital asset barred under the bill.
Trump was persuaded in part after conversations about the importance of passing the measure, including with industry officials, the aide said.
For Democrats, the state attorneys general enforcement mechanism had been a red line. «We need the state attorneys general to also have the power to prosecute if the Department of Justice refuses to,» said Sen. Angela Alsobrooks, D-Md., among the Democrats seen as vital swing votes Tuesday. «I have been very clear about the fact that I will not vote for any legislation that does not cover ethics.»
Gallego and Tillis did not immediately comment on the development late Sunday.
The vote's outcome could determine whether Washington cements crypto legitimacy into law or whether a frustrated, deep-pocketed industry unleashes even more campaign cash in the midterm elections.