President Trump spoke with U.S. senators at the White House on Thursday to resolve the conflict of interest provision that has become the latest major obstacle to advancing the CLARITY Act in the digital asset market.
Landmark legislation that would split regulatory jurisdiction over digital spot assets between the SEC (Securities and Exchange Commission) and the CFTC (Commodity Futures Trading Commission), according to people familiar with the project.
This is not simply a programming evolution. It’s a presidential intervention in a dispute over the drafting of a law that has revealed a structural tension at the center of U.S. crypto regulation: The same administration that is championing the CLARITY Act stands to benefit materially from the absence of the very ethics rules that Democrats are demanding as a condition of their votes.
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CLARITY Act: the ethics provision that broke down bipartisan talks
The CLARITY Digital Asset Marketplace Act passed the House of Representatives in July 2025 and was approved by the Senate Banking Committee in May 2026 with the support of Ruben Gallego (D-AZ) and Angela Alsobrooks (D-MD) – the only two Democrats to vote for the bill out of committee. Both senators have since conditioned their votes on a strong conflict of interest provision covering the president, vice president and members of Congress, making their support mathematically essential to gaining authorization for a cloture vote.
The sticking point is the scope of the application. A previous closed-door session involving Senators Gallego, Kirsten Gillibrand (D-NY), Cynthia Lummis (R-WY), and Bernie Moreno (R-OH), joined by White House Crypto Council Executive Director Patrick Witt, collapsed after a tentative agreement granting state attorneys general the right to sue the Justice Department for ethics enforcement lapses was withdrawn by the White House and negotiators Republicans. The proposed alternative — leaving law enforcement to the discretion of the U.S. Attorney General — was rejected by Democrats as structurally insufficient, given the AG’s direct accountability to Trump.
Trump revealed that he made more than $1 billion from crypto-related businesses in 2025, including World Liberty Financial, according to financial disclosures reported by CoinDesk. Some estimates place the Trump family’s total crypto-related income at around $2.3 billion since returning to office. This disclosure anchored Democratic demands: Sen. Chris Van Hollen (D-MD) proposed an amendment in committee that would have explicitly barred the president, vice president, and members of Congress from accessing crypto activities; he failed 11-13.
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Crypto Policy Timeline: Three Weeks of Remaining Talk Time
Senate Majority Leader John Thune said he will put the CLARITY Act up for a vote this month whether or not a final ethics deal is in place. The Senate returned from its Independence Day recess on July 13; August vacation begins after the first week of August, leaving approximately three weeks of viable speaking time. As of press time, it was unclear whether Thursday’s White House session included Democratic senators, with at least one person following the negotiations telling CoinDesk that they had not heard of invitations from Democrats.
A separate faction of Senate Democrats held a news conference Tuesday, calling the CLARITY Act a corrupt bill and threatening to block it — but that group notably excluded Gallego and Alsobrooks, signaling that the bipartisan path to passage remains structurally intact if the ethics language can be resolved.
TD Cowen warned that if the ethics impasse extends beyond the August recess, the bill could slide into 2027. Astraea Law estimates it will be signed into law around August 2026 if the conflict of interest provision is resolved within the current deadline. Galaxy Research estimates the chances of passage in 2026 at around 50/50.
We suspect that Thursday’s meeting at the White House represents the administration’s calculation that a presidential signal on acceptable ethics language is now the only remaining mechanism capable of moving Gallego and Alsobrooks out of their precondition — but without knowing which senators were in the room, the session’s ability to produce lasting bipartisan agreement remains an open question.
For the broader landscape of crypto regulation, the issues extend well beyond the ethics section. Key provisions of the CLARITY Act relating to market structure – exchange registration, custody standards, and the CFTC/SEC jurisdictional boundary – remain unresolved in U.S. law. Each week that the ethical impasse persists, compliance deadlines for digital commodity exchanges and custodians remain in statutory limbo.
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Neil is a professional cryptocurrency content writer with years of experience. He has written for various cryptocurrency websites to report on the latest news and has been hired by all kinds of cryptocurrency projects, to create content that would increase their visibility and attract more potential investors.
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