White House Yields on Crypto Ethics Clause, Giving CLARITY Act a Glimmer of Light 📜

The White House has agreed to ethics provisions in the Digital Asset Market Clarity Act and forwarded the language to select Senate Republicans, according to a Tuesday Punchbowl report, a development that could unlock Democratic votes needed to advance the long-stalled crypto market structure bill. The package was negotiated with Senators Cynthia Lummis and Bernie Moreno, though neither has publicly disclosed the details. A White House official told Cointelegraph the administration is "committed to working with Congress to see the CLARITY Act advance and has agreed to the most comprehensive and wide-ranging ethics provision in history," adding it had "bent over backward to accommodate [Democrats'] concerns."

The breakthrough follows a Monday Truth Social post from President Donald Trump urging the Senate to pass CLARITY "in honor of" the late Senator Lindsey Graham, who died Saturday at age 71 and whom Trump called "a big supporter" of the bill. Trump warned that "China, and many other countries, would like to take complete and total control of this major financial 'happening,' as well as A.I., where we are now leading," writing, "Don't let China win on either subject!!!" Senator Cynthia Lummis echoed the sentiment on X, saying Graham "was passionate about ensuring that American leadership stayed at the forefront of everything - including digital assets." Graham, a South Carolina Republican who served in the Senate since 2003, voted in favor of the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act in 2025 but did not appear to have made any public statements directly supporting CLARITY and did not cast any vote advancing the bill.

The ethics provision would restrict presidents, vice presidents, members of Congress and other senior federal officials from profiting from digital assets while in office, a Democratic demand sharpened by Trump's disclosure of more than $1 billion in crypto income in 2025, including over $500 million from his family's World Liberty Financial venture. Several Senate Democrats, including Elizabeth Warren, Chris Murphy, Jeff Merkley and Chris Van Hollen, had said any CLARITY bill would be "worthless" without such guardrails, while a Tuesday Democratic press conference called for opposition if the bill did not sever Trump's "corrupt" ties to the sector. The unresolved ethics language had also held up an updated bill text that Senator Thom Tillis said he hoped could be agreed to by the end of this week, with the chamber needing 60 votes on the floor.

Procedurally, the picture is complicated. With Graham's death and Senator Mitch McConnell's hospitalization, Republicans' majority sits at 51-47, requiring at least seven Democratic votes to clear the 60-vote cloture threshold. The bill, which passed the House 294-134 in July 2025 and cleared the Senate Banking Committee 15-9, has sat on the Senate Legislative Calendar since June 1 with no floor vote scheduled. Former CFTC Commissioner Summer Mersinger, now CEO of the Blockchain Association, said on the Thinking Crypto podcast that leaders of the Senate Banking Committee and Senate Agriculture Committee are merging their two versions into one proposal, adding she expects a Senate vote "probably early next week" and that negotiators are "at the one-yard line right now."

Prediction markets registered the shift. Polymarket's "CLARITY Act signed into law in 2026" contract climbed from a recent low near 24% to 42%–44% on the news, while Kalshi traders priced a 79% chance the Senate votes on the bill before the August recess, up from 68.8% the prior day, and a 36% chance it becomes law in 2026. The window is narrow: Senate Majority Leader John Thune said on X there is "a good chance" of a bipartisan deal but warned it "could still change," and analysts including Galaxy Digital's Alex Thorn have cut internal passage odds to 50% citing the shrinking calendar. Solana Policy Institute President Kristin Smith cited building momentum, while Ripple CLO Stuart Alderoty urged lawmakers to back the bill, warning that voting against it would let "bad actors" continue exploiting gaps, referencing the FTX collapse. The price of Bitcoin (BTC) rose above $66,000 early Tuesday, and XRP pushed to an intraday high of $1.1511 on hopes the bill would formally classify it as a digital commodity.