Trump accepts sweeping crypto ethics rules to rescue CLARITY Act

The White House has accepted what it calls the most extensive federal ethics restrictions ever proposed as the CLARITY Act seeks the Democratic votes needed to clear the Senate’s 60-vote threshold.

Punchbowl News reported on Tuesday that White House officials reached an agreement on ethics language during talks with Republican Senators Cynthia Lummis and Bernie Moreno. The provision could apply to President Donald Trump’s crypto interests, although neither senator has released its wording or explained how it would be enforced.

A White House official confirmed the concession in a recent statement, describing the proposed language as “the most comprehensive and wide-ranging ethics provision in history.” According to the official, the administration had “bent over backward” to address concerns raised by Democratic lawmakers.

The agreement removes one of the main disputes holding up the Digital Asset Market Clarity Act, but it does not guarantee enough Democratic support for passage. The Senate has not published its final text or placed a floor vote on its calendar, leaving lawmakers with a limited window before the chamber’s August state work period.

Ethics deal removes a key Senate obstacle

Democratic senators have made restrictions on political crypto dealings a condition for supporting the legislation. Elizabeth Warren, Chris Murphy, Jeff Merkley and Chris Van Hollen previously argued that a market structure bill would be “worthless” unless it addressed Trump’s links to the digital asset industry.

Their concerns include Trump’s namesake memecoin and his family’s involvement with World Liberty Financial. Democrats have also requested congressional hearings into the president’s investments and other connections to crypto companies before the Senate holds a vote.

Details of the White House compromise remain unclear, including whether its limits would cover the president’s family and which authority would enforce them. Barron’s reported that some Democrats were concerned enforcement could rest only with the Trump-controlled Department of Justice instead of also allowing action by state attorneys general.

Earlier negotiations had shown how difficult the ethics issue could be. Patrick Witt, executive director of the President’s Council of Advisors for Digital Assets, told CoinDesk in May that the administration supported rules applying “from the president all the way down to the brand new intern on Capitol Hill,” but opposed provisions written against one official or family.

Senate negotiators have resolved or narrowed some other disputes while the ethics talks continued. Coinbase vice chair Ryan VanGrack recently said that Democrats had secured stronger customer safeguards, giving the Senate legislation “more teeth” than earlier versions.

“At the end of the day, this is about customer protections. The status quo lacks this infrastructure, lacks these protections, and the Democrats used this opportunity, wisely, to make sure that customers were first and foremost in [this bill].”

Stablecoin rewards, anti-money laundering controls, tokenized securities and protections for software developers have also complicated negotiations. As reported by crypto.news in May, the Senate Banking Committee advanced the bill with support from every Republican on the panel and Democratic Senators Ruben Gallego and Angela Alsobrooks, producing a 15-9 vote.

Despite backing the committee action, Gallego and Alsobrooks did not commit to supporting the eventual floor version because negotiations were still underway. Republicans would therefore need to preserve that support and attract more Democrats to reach 60 votes in the full Senate.

The House passed its CLARITY Act version in July 2025 during Republicans’ “Crypto Week.” The proposal would divide oversight of digital assets between federal regulators and set standards for deciding when tokens fall under securities or commodities rules.

Bitcoin rises while passage odds remain below 50%

Crypto-linked markets climbed after reports of the White House agreement. Bitcoin traded above $66,000 on Tuesday and reached a seven-week high, while Coinbase shares rose about 10% and Circle gained roughly 7%.

Prediction-market traders remained less convinced. A Polymarket contract shown on Tuesday assigned a 48% chance that the CLARITY Act would become law in 2026, down 17 percentage points, with about $2.11 million in recorded volume. The contract’s pricing indicated that traders still viewed passage as uncertain despite the reported ethics agreement.

President Trump had pressed senators to approve the legislation “in honor of” the late Senator Lindsey Graham, whom he described as a major supporter of the measure. Industry executives, including Coinbase representatives, have also urged Congress to establish federal market rules.

Still, the missing legislative text leaves the effect of the ethics compromise untested. Until Democratic senators review the provision, disclose their positions and help schedule a floor vote, the White House agreement remains a potential route to 60 votes rather than proof that the CLARITY Act will pass.