Ethics Battle Freezes Clarity Act Ahead of Senate Recess

With the Senate set to go on recess in three weeks, after Aug. 7, the Clarity Act is still facing several hurdles, Bloomberg reported Friday (July 17).

Several Democrats involved in the negotiations said they have reservations about the latest version of the cryptocurrency bill, particularly around ethics issues and President Donald Trump’s involvement with crypto ventures, according to the report.

Other hurdles include Democrats’ calls for stronger measures to prevent the use of crypto for illicit finance, as well as the need to reconcile the differences between the banking committee’s version of the bill and the agriculture committee’s version, per the report.

There are also concerns about how little time senators may have to review the bill before the chamber goes on recess. Senators who are not members of the committees that have been working on the bill may not yet be familiar with it and may have questions that can’t be answered before the recess, according to the report.

Some senators who voted for an earlier crypto bill, the stablecoin-focused GENIUS Act, and may have been considered likely to support the Clarity Act as well, have either voiced concerns about the Clarity Act or declined to comment on it, per the report.

Axios reported Friday that the main factor holding up the Clarity Act is a provision that Democrats have sought to add to the bill after Trump disclosed earlier this year that he earned $1.4 billion from his crypto ventures since the start of his second term.

CoinDesk reported Friday that several Democrats have raised concerns about public officials having conflicts of interest related to crypto, and that no bipartisan language addressing those concerns has been added to the bill.

PYMNTS reported July 8 that advocates were continuing to push for passage of the crypto bill as the Aug. 7 deadline approaches, saying that it is critical to have a federal standard for crypto assets.

On July 1, PYMNTS reported that with the Clarity Act stalled, there is now a disconnect where private capital is moving on implementation of blockchain financial services while public policy remains caught up in legislative timing.