Dirksen Senate Office Building in Washington, D.C.

The CLARITY Act’s Hardest Fight Is Over Who Gets to Profit

By Isaac • July 13, 2026 9:15 pm • Comments

The CLARITY Act was supposed to settle who regulates America’s crypto markets.

Its hardest remaining fight is over who gets to profit while those rules are written.

A new Senate draft is expected within days, but the ethics section may still be unfinished.

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That is no side issue.

The bill needs 60 votes, and the lawmakers demanding a conflict-of-interest rule hold enough votes to stop it.

The underlying legislation has already traveled a long way.

The Senate Banking Committee advanced its version 15-9 in May after months of negotiations, with two Democrats joining the Republican majority.

The committee said the text followed nearly a year of bipartisan talks and moved the bill from markup to the Senate floor. Earlier drafts had gone through hearings, a public request for information and input from regulators, law enforcement, banks, crypto companies and consumer advocates.

Supporters say it would give the Commodity Futures Trading Commission spot-market authority over digital commodities, preserve defined Securities and Exchange Commission powers, impose federal standards on intermediaries and strengthen sanctions and anti-money-laundering tools.

The framework would also put customer-asset, recordkeeping and registration duties around exchanges, brokers and dealers operating in the new federal system.

Those provisions are consequential on their own. The conflict question now determines whether enough senators will support them.

President Trump’s 2025 financial disclosure put a much larger number on the issue just as he was urging Congress to pass the bill.

In a July 13 letter to Majority Leader John Thune and Minority Leader Chuck Schumer, Senator Elizabeth Warren said the disclosure showed roughly $1.4 billion from the president’s crypto ventures during the year.

Her letter cited interests connected to World Liberty Financial, a stablecoin business and family-controlled entities, then demanded that the final bill prevent the president, vice president, senior administration officials, members of Congress and their families from profiting from the crypto industry.

Warren pointed to a reported 30 percent family stake in DT Marks Defi LLC, which in turn held an interest in World Liberty Financial’s parent. She said that entity generated more than $590 million in 2025 income.

The letter also highlighted large third-party stakes in the private entities, arguing that undisclosed counterparties make the conflict and national-security questions harder to evaluate.

It states the coverage Warren wants, though it does not supply complete statutory definitions for profit, divestiture, grandfathering or enforcement.

Warren’s public case is blunt:

The principle is easy to state.

The statute is much harder to write.

Congress first has to decide who is covered.

A rule limited to the president would miss the vice president, agency leaders, lawmakers and senior staff who can influence the same regulatory system.

A rule covering spouses but not dependent children, family trusts or controlled companies could leave an obvious route around the ban.

A rule covering every adult relative, regardless of financial connection, could become too broad to administer or defend.

The sensible line is control and beneficial ownership.

If a covered official or immediate family member controls an entity, receives its income or can direct its digital-asset activity, moving the asset into an LLC should not make the conflict disappear.

The second question is which conduct is prohibited.

Senator Kirsten Gillibrand has proposed a focused answer.

In a July 3 statement, Senator Kirsten Gillibrand called for barring elected officials and their spouses from issuing or sponsoring digital assets, including memecoins. The statement also cited the First Lady’s memecoin and $6 million in reported income from NFTs and other digital collectibles.

Gillibrand cited $636 million in 2025 income from the president’s memecoin and argued that public officials should not be able to create a token whose value may rise with their political power or access.

Her proposal would make that conduct illegal for a president as well as members of Congress, and it would extend the restriction to their spouses.

That proposal targets the clearest conflict: an official launching, sponsoring or promoting a financial product tied to his own identity while the government sets the rules around it.

It does not necessarily prohibit passive ownership of Bitcoin, an index fund holding crypto companies or a preexisting interest in a private business.

Warren’s demand to prevent officials from “profiting” is broader.

Profit could include issuing a token, collecting fees, promoting an asset, trading on nonpublic information, receiving dividends, holding equity in a crypto company or simply owning Bitcoin while supporting favorable policy.

Those activities do not present the same conflict.

A law that treats them as interchangeable will either sweep too widely or become impossible to enforce consistently.

The third question is what happens to existing holdings.

CoinDesk reported that negotiators have discussed ownership limits, family coverage, disclosure rules and delayed implementation that would avoid immediate disruption to current interests.

The same report said those talks had hit a wall, the parties had not agreed on a final scope and the next draft may arrive without completed ethics language.

The ethics section is one of the final pieces still being negotiated. A new draft is expected within days, while the Senate has only a few working weeks before its summer recess and the midterm calendar takes over.

Senate leaders have discussed a floor vote this month, so an incomplete section would push the decisive bargaining into the narrowest part of the timetable.

The bill still needs 60 votes. That gives the Democratic senators demanding a meaningful ethics provision direct leverage over whether the broader framework advances.

A rule that applies only to assets acquired after enactment could leave today’s largest conflicts untouched.

An immediate divestment order could force rushed sales, produce disputed valuations and become a political weapon whenever control of Congress changes.

A short transition period is more workable.

Covered officials could be required to disclose their holdings, stop issuing and promoting personal tokens immediately, and then divest, place assets in a genuinely independent vehicle or recuse from specific decisions within a fixed period.

Any trust has to be genuinely blind. Its label is irrelevant.

An official should not be able to know the holdings, direct transactions or receive asset-specific updates while claiming the conflict has been removed.

The fourth question is how to measure profit.

Financial disclosures mix cash income, ownership percentages, ranges and asset values. A token can appreciate without being sold.

A private-company stake may be valuable without producing current cash.

That makes “no profit” a weak legal standard on its own.

The rule should identify prohibited conduct and reportable interests instead of waiting for regulators to calculate an official’s net gain after the fact.

Issuance fees, sponsorship payments, promotional compensation and revenue from controlled crypto businesses can be prohibited directly.

Material ownership can trigger disclosure, divestiture or recusal requirements even before a profit is realized.

The fifth question is enforcement.

A ban with no independent decision-maker will become another congressional promise that depends on the covered official’s allies choosing to act.

The law has to name the agency that receives disclosures, define audit authority, establish penalties and explain how Congress’s constitutional discipline powers interact with executive-branch enforcement.

It also needs anti-evasion language for controlled entities, nominees and transactions routed through family members.

None of that eliminates the case for the rest of CLARITY.

Senator Cynthia Lummis argues that agency rulemaking cannot supply the statutory authority Congress can:

She is right about the limit of agency action.

The CFTC cannot give itself broad spot-market jurisdiction because Congress failed to finish a bill. An SEC rule can be revised by a later commission or challenged for exceeding the agency’s authority.

Federal legislation can set durable jurisdiction, registration, customer-asset, disclosure and enforcement rules across the market.

That is precisely why the ethics provision matters.

A government that claims new power over an industry should be able to show that the people exercising that power are not simultaneously selling personal tokens, collecting sponsorship revenue or hiding material interests in controlled companies.

The cleanest compromise would begin with conduct, not party or personality.

Ban covered officials and immediate family members from issuing, sponsoring or promoting digital assets while in office.

Require full beneficial-ownership disclosure for material crypto interests and controlled entities.

Use divestiture, a truly independent trust or transaction-specific recusal for holdings that create a direct conflict.

Apply the rule to the president, vice president, senior executive officials and members of Congress under parallel enforcement systems.

Give current officeholders a short, public transition period instead of a permanent grandfather clause.

And impose meaningful penalties for concealment or evasion.

Other disputes remain in the bill, including developer protections and the reach of financial-crime rules.

Ethics is still the hardest one because it determines whether enough senators will trust the framework to pass it.

CLARITY can create rules for America’s crypto market.

Before it does, Congress has to prove those rules apply to the people writing them.

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