The Senate’s latest effort to establish a comprehensive crypto market structure, the CLARITY Act, is encountering significant resistance from Democratic lawmakers who insist on stricter ethics provisions covering President Donald Trump’s cryptocurrency interests.
Republican senators briefed President Trump at the White House on Thursday, with plans to release updated text of the bill shortly thereafter. However, Democrats were notably absent from the meeting and have signaled they will oppose the current draft unless it includes more robust ethics rules.
Senator Bernie Moreno indicated that the updated regulatory text could be released following the White House meeting. Senator Cynthia Lummis echoed this sentiment, expressing hope that the draft would become public after lawmakers consulted with Trump, though she did not confirm a specific timeline.
Moreno noted that lawmakers have spent months engaging with Democrats and argued that the Senate should move toward a vote before the August recess. Yet Democratic senators contend that the expected version does not reflect a bipartisan agreement, accusing Republicans of taking ethics language to Trump before concluding negotiations with Democratic lawmakers.
Senator Cory Booker emphasized that talks remain active. “I hope they’re not going to drop something before we finish our negotiation,” Booker said. “The only way to get this done is a bipartisan pathway.”
The core dispute revolves around ethics rules for public officials with financial ties to crypto companies, tokens, and digital asset projects. Democrats are pushing for firm limits that prevent senior officials from profiting from crypto ventures while in office.
Senator Ruben Gallego described the ethics language he reviewed as “very weak,” stating it gives the president “a lot of latitude” to continue earning from crypto interests without adequate consumer protection. Gallego warned that Democrats would not provide the necessary votes without stronger rules. “At the end of the day, we don’t have strong ethics,” he said. “You’re not going to have the Democratic votes.”
Republicans dispute this characterization. Moreno insists the bill includes strong ethics measures, and the White House supports rules covering all elected officials but has resisted language perceived as targeting Trump exclusively.
A Democratic Senate aide claimed the Republican proposal is weaker than what Democrats would accept, adding that Democratic negotiators had not approved the version shown to the White House.
The CLARITY Act would divide digital asset oversight between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). It would also establish registration and operating rules for exchanges, brokers, and other crypto businesses. Supporters argue the framework would help firms classify digital assets and meet federal requirements.
Republicans currently lack the 60 votes needed to overcome a potential filibuster, making Democratic support essential. While some Democrats backed earlier versions during committee work, those votes do not guarantee support for the final measure. Opposition from key negotiators now complicates the vote count.
The Senate calendar adds further urgency, as lawmakers must complete other major bills before the August recess. Any Senate version would also require House approval or further negotiations between both chambers.
Crypto companies have urged Congress to pass market structure legislation, citing ongoing uncertainty over token listings, custody, registration, and trading services. Without a new law, firms continue to rely on agency guidance, court decisions, and enforcement actions to determine whether a digital asset falls under SEC or CFTC oversight.
The next step depends on the wording released after the White House meeting. Democrats want stronger guardrails, while Republicans push for a vote before the recess. Until both sides reach an agreement, the CLARITY Act faces a difficult path through the Senate.