Negotiations Resume After Democrats Reject CLARITY Ethics

Bipartisan negotiations over landmark cryptocurrency legislation have resumed after Democrats rejected an ethics provision negotiated between the White House and Republican senators, casting doubt on the bill's path to passage before Congress's August recess. The dispute centers on enforcement of new rules designed to address potential financial conflicts of interest for senior federal officials, including the president.

The ethics language, added to the sweeping CLARITY Act on July -22, 2026, would bar the president and other officials from issuing or sponsoring digital assets while in office. However, it grants the Department of Justice exclusive authority to enforce these rules, a point Democratic lawmakers have called unacceptable. They argue that a president could potentially influence the Justice Department and have pushed for state attorneys general to share enforcement power. Senator Ruben Gallego described the White House-backed proposal as inadequate, stating it failed to reflect months of prior bipartisan work.

The provision was crafted through discussions involving Republican Senators Cynthia Lummis and Bernie Moreno and White House officials. Lummis defended the...