Trump Crypto Conflict of Interest Controversy Escalates as Progress on U.S. Digital Asset Market "Clarity Act" Faces Obstacles

According to Zhitong Finance APP, the progress of the U.S. Senate’s advancement of the Digital Asset Market Clarity Act encountered resistance this week. Democratic senators involved in bipartisan negotiations stated that they have not yet agreed to the latest bill framework proposed by Republicans, and with only a few weeks left before Congress adjourns for its August recess, the timetable for advancing the bill as planned is becoming increasingly tight.

It is understood that Republican lawmakers initially planned to brief President Trump on the progress of the Clarity Act negotiations on Thursday. This meeting could impact how Congress handles the conflicts of interest and ethical issues related to Trump’s massive cryptocurrency business interests, which is one of the main points of contention between Democrats and Republicans.

Adam Schiff, a Democratic senator involved in the negotiations, said the current bill text still requires “major modifications” before it can obtain Democratic support. He noted that while disagreements on most provisions have been narrowed, the White House recently “backtracked” on ethics-related issues, overturning content that Democrats had previously believed was agreed upon.

Another core Democratic negotiator, Senator Ruben Gallego from Arizona, also said Democrats have not approved any new version of the bill led by Republicans, even though the Republican side stated that a revised draft would be released soon.

Cynthia Lummis, one of the chief Republican negotiators and senator from Wyoming, said talks are continuing on a bipartisan basis and have made substantive progress.

Apart from ethical issues, Democrats are also demanding stronger anti-money laundering and anti-illegal financial activity provisions to prevent crypto assets from being used for illicit fund movements. Moreover, different versions of the bill submitted separately by the Senate Banking Committee and the Agriculture Committee still need further coordination.

Senate Agriculture Committee Chair John Boozman stated that coordination between the two bills is “99.9%” complete.

Republican Senator Bernie Moreno emphasized that both parties have been negotiating around the bill for over a year, investing significant time and effort, and hope to bridge the remaining gaps soon.

Democratic Senator Catherine Cortez Masto, who is responsible for anti-illegal finance provisions, stated that negotiations are still ongoing “in good faith.”

However, multiple lawmakers are concerned that even if the revised bill is released soon, the Senate may find it difficult to complete deliberations before the August 7 adjournment. Senate Banking Committee member John Kennedy stated bluntly: “Without a bill, you can’t pass a bill.”

He pointed out that even if a new draft is issued, many senators who were not involved in earlier discussions will raise numerous questions and may call for a delay in voting. The entire process often takes several weeks, and Congress currently does not have sufficient time.

Analysts note that supporters of the Clarity Act have only a slight advantage in votes. The market generally regards the vote result of the previously passed Genius Act as a key reference for the Clarity Act.

The Genius Act primarily established the regulatory framework for stablecoins and passed in the Senate last year with 68 votes in favor and 30 against. Eighteen Democratic senators voted in favor, with only two Republican senators opposed.

By contrast, the Clarity Act has a broader regulatory scope—it covers not only stablecoins but attempts to establish an overall regulatory framework for digital assets. As a result, it is likely to receive slightly less support than the Genius Act.

At the same time, some Democratic senators who previously supported the Genius Act now express reservations about the Clarity Act. Among them, Schiff, Gallego, and Maryland Democratic Senator Angela Alsobrooks all indicated that their concerns have not yet been fully addressed.

Additionally, Democratic Senator Raphael Warnock believes that Trump and his family’s commercial activities in the cryptocurrency sector in recent years have complicated legislative discussions and hindered bipartisan consensus.

Currently, with only about three legislative weeks remaining before Congress's summer recess, supporters of the Clarity Act are stepping up negotiations in hopes of completing the legislative process before adjournment.

As of Friday’s close, Bitcoin edged slightly higher, with its price oscillating around $64,000. Most Bitcoin-related stocks declined: Strategy (MSTR.US) closed up 0.87% against the trend, Coinbase (COIN.US) closed down 2%, Circle (CRCL.US) closed down 0.3%, and Robinhood (HOOD.US) dropped 5.72%.