Ethics, Ethics Everywhere: Senators Still Stuck on Crypto Conflict-of-Interest Loopholes 🧵

Bipartisan negotiators convened on Capitol Hill on Tuesday to narrow remaining disagreements over the Digital Asset Market Clarity Act, with ethics rules for government officials emerging as the legislation's central sticking point. The meeting, confirmed by crypto journalist Eleanor Terrett on X, included parallel discussions on potential additional provisions for decentralized finance, though ethics remained the primary focus. "Bipartisan discussions are taking place on Capitol Hill today relating to ethics, I'm told. Negotiators are also discussing DeFi provisions, but ethics remains the primary hurdle," Terrett wrote.

The bill's progress has come to hinge on the conflict-of-interest language, which sources say would bar the president, vice president and all members of Congress from significant crypto holdings. The deepest current point of disagreement is enforcement: Democrats have held to their preference that state attorneys general be able to enforce the ethics restrictions on federal officials, while the White House and Republican negotiators are insisting on the U.S. attorney general as the top authority. President Donald Trump has agreed to broad restrictions for government officials, including himself, and a White House official told a crypto industry briefing on Tuesday that Trump accepted "the most comprehensive and wide-ranging ethics provision in history."

Democratic Senator Kirsten Gillibrand, chair of the Democratic Senatorial Campaign Committee, is facing criticism from progressive groups including Indivisible and Demand Progress over her role in negotiating a compromise. The groups sent a letter to every Democratic Senate office flagging concerns over Gillibrand's crypto ties and her son's new crypto venture. Senator Cynthia Lummis's office told Terrett that last week's White House meeting "went well," and a spokesperson said the ethics text set to release in the coming days "will reflect that productive conversation."

August 7 is seen as the major deadline for finishing the Clarity Act this year, marking the final day before the Senate's summer recess. Industry participants are expecting the bill to reach the floor as soon as the beginning of next week, consistent with prior signals from Senate Majority Leader John Thune, and the legislation could require several days to reach a final vote. Beyond ethics, negotiators have also continued talks around customer protection and the treatment of developers within the bill's illicit-finance safeguards, but those issues are described as secondary to resolving the enforcement question.