Democrats demand ethics guardrails as Clarity Act nears vote

Senate Democrats have stepped up opposition to the Clarity Act and are pressing for new ethics language that would bar President Donald Trump, the vice president, senior administration officials, members of Congress and their families from profiting from cryptocurrency. The bill must clear the Senate before Congress’ August recess, leaving fewer than four weeks for negotiators to resolve outstanding language.

On Monday, Sen. Elizabeth Warren wrote to Senate leaders asking that the Clarity Act include explicit prohibitions after recent financial disclosures showed the president reported more than $1.2 billion in crypto-related income last year. In her letter she wrote: “The crypto legislation heading to the Senate floor must prevent the president, vice president, senior administration officials, members of Congress, and their families from profiting off the crypto industry. Anything less would be a flagrant giveaway to the president and his family at the expense of the public.”

Five Senate Democrats — Warren, Richard Blumenthal, Gary Peters, Dick Durbin and Ron Wyden — requested congressional hearings into the president’s crypto holdings, citing concerns about conflicts of interest, foreign influence and the possibility that the president could affect policy while profiting from the market. Additional Democrats, including Sens. Chris Murphy and Chris Van Hollen, plan a press conference to emphasize the disclosures and provisions of the bill they say would weaken oversight.

Supporters of the Clarity Act contend the legislation would legalize most crypto activity in the United States and clarify which agencies have regulatory authority, which supporters say would increase oversight. Opponents argue the bill would create carveouts that exempt some blockchain-based assets from existing banking and securities rules established after the Great Depression.

The bill has been discussed on Capitol Hill for more than a year. It requires 60 votes in the Senate to overcome a filibuster, meaning at least seven Democrats must back it if all 53 Republicans are present. Senate Republicans’ ranks have been affected recently: Majority Leader Mitch McConnell is hospitalized, and Sen. Lindsey Graham died and is awaiting replacement.

President Donald Trump urged the Senate to approve the Clarity Act “in honor of” Graham, calling him a “big supporter” of crypto legislation. Senate Democrats note Graham did not play a central role in negotiations over the Clarity Act and spoke rarely about the measure.

Negotiators have left several sections of the bill unresolved as they attempt to secure bipartisan support while addressing Democratic demands for additional ethics provisions. With the August recess approaching, Senate leaders are working on language changes and policy clarifications intended to win the votes needed for passage.