Stalled negotiations over an ethics provision for the Clarity Act have become a critical obstacle to advancing US cryptocurrency legislation, with Democratic Senator Ruben Gallego accusing the White House of failing to respond to multiple proposals. The provision, which would bar public officials and their spouses from issuing or sponsoring digital assets, has been delayed amid concerns over President Donald Trump’s expanding crypto holdings and business interests.
A new bipartisan proposal, co-authored by Gallego and Republican Senator Thom Tillis, would shift enforcement of the ethics rule to state attorneys general, bypassing the Department of Justice. The Senate requires 60 votes to proceed, with a procedural vote scheduled for 15 September. Gallego said efforts to secure agreement with the White House have yielded no progress, with offers repeatedly met with silence or counteroffers that “come back even slightly further back.”
The July ethics agreement included a sunset clause ending in January 2029, but its terms remain unresolved. Trump’s crypto-related activities, reportedly generating “income of millions of dollars,” have intensified scrutiny over potential conflicts of interest. The outcome of negotiations remains uncertain, with no response from the White House to date.
Analysts suggest the stalled deal risks derailing the Clarity Act, which aims to regulate stablecoins and enhance transparency in the crypto sector. With bipartisan support for the legislation’s core provisions, the ethics dispute has become a focal point for broader political tensions over governance and regulation.
Written by Steven Cook
Regulation Desk
