Trump Backs Stricter Regulations on Officials' Crypto Involvement

On September 14, U.S. Senate Republicans unveiled the finalized version of the CLARITY Act, which imposes stricter regulations on government officials engaging in the cryptocurrency sector. President Donald Trump has agreed to the new terms, as stated in a release by Senators Cynthia Lummis, John Boozman, and Tim Scott.

This text was prepared ahead of the procedural vote scheduled for September 15. According to the bill's authors, 126 significant amendments were made during negotiations at the request of Democratic lawmakers.

A major concession involved expanding the role of state prosecutors in enforcing ethical standards. Previously, Democrats and Republican Senator Thom Tillis had called for stronger measures due to concerns over potential conflicts of interest stemming from Trump's crypto business.

Changes Made to the Bill

The final version added a requirement to the ban on issuing and sponsoring digital assets, mandating officials to divest significant financial interests in related businesses.

Affected officials, along with their spouses, will be required to sell such interests or place them in a qualified blind trust, managed by an independent trustee with no influence over its decisions.

State prosecutors will have the authority to seek judicial enforcement of these prohibitions. If an official is suspected of violating the law, a lawsuit can be filed against the U.S. Attorney General.

Additionally, direct lawsuits against crypto intermediaries that facilitate the issuance of assets in violation of the ban will be permitted.

Another set of amendments addressed banks' concerns regarding stablecoins. If the Treasury Secretary determines a significant outflow of deposits from local banks, the department will be required to create rules limiting rewards for holders of payment stablecoins. These powers will expire 18 months after the law is enacted.

The authors also adjusted provisions of the Blockchain Regulatory Certainty Act, extending certain protections from money transfer registration requirements to miners and validators, who were previously excluded.

However, direct references to the criminal statute 18 U.S.C. 1960 were removed from the text.

The revisions strengthened restrictions on related-party transactions and conflicts of interest for crypto exchanges, brokers, and dealers.

Prospects for Voting Success

The Senate is set to vote on September 15 to end debate on the proposal to consider the CLARITY Act. Achieving this will require 60 votes. Success would advance the bill, but further amendments and votes will still be necessary.

In a comment to CoinDesk, Summer Mersinger, head of the Blockchain Association, expressed optimism ahead of Tuesday’s vote and thanked senators from both parties for their continued negotiations.

However, confirmed support from the required number of lawmakers has not yet been secured. According to reports, as of Friday, September 11, supporters had not yet gathered the necessary 60 votes, and negotiations continued over the weekend.

The latest concessions aim to resolve one of the major obstacles—the ethics dispute. Democratic Senator Angela Alsobrooks emphasized the need for state prosecutors to have authority in case the Justice Department fails to act.

"I have made it abundantly clear that I will not vote for any bill that does not address ethical issues," she stated.

This is a condition for support, but does not confirm agreement with the published version.

Even if the Senate passes it, a swift conclusion to the process is not guaranteed. Earlier in September, Galaxy Research Director Alex Thorn expressed skepticism about the bill’s likelihood of passing before the midterm elections in November, citing the compressed schedule of the House of Representatives, which must reconcile the Senate's changes.

Market predictions also indicate that the chances of completing the process by year-end remain below 50%. As of this writing, traders on Polymarket estimate a 31% probability that the legislation will pass both chambers and be signed into law by the President before the end of 2026.

Source: Polymarket.

Users on Kalshi assign a 49% chance of the CLARITY Act or another crypto market structure legislation meeting contract conditions by January 1, 2027.

Notably, on September 10, Republicans presented an updated version of the bill including requirements for DeFi trading protocols that do not meet decentralization criteria.