President Donald Trump agreed to expanded conflict-of-interest rules and state-level enforcement powers to secure key Senate votes for the Clarity Act, a bill aimed at establishing a federal regulatory framework for digital assets.
Trump accepted approximately 80 percent of a proposal drafted by Senators Thom Tillis and Mark Gallego that would require federal officials and their spouses to divest holdings or place assets in blind trusts, according to reporting on the announcement. The agreement also grants state attorneys general authority to enforce the ethics provisions, a concession to senators concerned about regulatory overreach at the federal level.
The Clarity Act has sought to define which agencies oversee cryptocurrency trading, lending and custody, and to preempt state digital-asset rules in areas the federal government addresses. The bill faced resistance from moderate Senate Republicans worried that it lacked guardrails against conflicts of interest among officials responsible for writing those rules. The Tillis-Gallego ethics framework was designed to address those concerns by preventing cabinet officials, agency heads and their families from profiting off decisions they made in office.
Trump's acceptance of the expanded ethics language removed a key obstacle to a floor vote. Senate leadership said privately that without movement on conflict-of-interest rules, at least three Republican senators would vote against the bill or abstain, denying it the 50-vote majority needed for passage under the current chamber composition.
The divestiture requirement applies to officials with jurisdiction over digital assets, including Treasury, the Securities and Exchange Commission, the Commodity Futures Trading Commission and the Federal Reserve. Blind-trust arrangements would be overseen by the Office of Government Ethics, with annual certifications filed publicly.
State attorneys general would gain standing to sue the federal government if they believe the bill's provisions preempt their own digital-asset laws without legal basis. This enforcement mechanism differs from earlier drafts, which left enforcement solely to Congress and the executive branch.
The outstanding issues concern the definition of which crypto products fall under SEC versus CFTC jurisdiction and whether staking and yield-bearing assets qualify as securities. Trump's team and Senate leadership are expected to present revised statutory language within days.
The number of Senate Republicans who stated firm opposition dropped to two after Trump's ethics concession, according to statements released today. If both vote no and all Democrats abstain or vote no, the bill would still clear 50 votes. Senate Majority Leader John Thune's office said floor consideration could begin in the week of September 21.
