WASHINGTON — For weeks, President Donald Trump had been receiving a clear signal regarding the comprehensive cryptocurrency legislation being developed in the Senate: to push it through, he needed to accept ethics regulations that applied to him as well.
Initially, Trump consented to a provision that would prevent him and his wife from launching the types of meme coins they quickly introduced while gearing up for his second term in office. Then, late Sunday, he made another concession, agreeing to a stricter ethics proposal demanded by several influential senators.
This crucial Senate vote on the cryptocurrency legislation, set for Tuesday, could be a pivotal moment for the $2.3 trillion industry. The outcome largely depends on whether Trump’s agreements meet the necessary requirements. This vote might determine if Washington formally recognizes cryptocurrency or if a dissatisfied, wealthy sector retaliates by contributing even more campaign funds in the midterm elections.
“Voting against the Clarity Act isn’t simply a principled stand against President Trump,” stated Sen. Cynthia Lummis, R-Wyo., the primary architect of the crypto bill, in remarks to The Associated Press. “It’s a vote against introducing stringent restrictions on politicians regarding crypto investments.”
Trump’s commitment shapes the crypto bill’s outcome
During his presidency, Trump has accumulated substantial crypto wealth, complicating the landscape for senators striving to integrate the emerging digital asset sector into the mainstream financial framework.
With this context, Lummis and Sen. Bernie Moreno, R-Ohio, visited the White House in mid-July to inform Trump that he would need to adhere to conflict-of-interest guidelines to gain crucial Democratic support for the legislation.
Trump agreed with unexpectedly minimal resistance, according to two anonymous sources familiar with the discussions in the Oval Office.
The proposal presented during that meeting by Lummis, an experienced crypto advocate knowledgeable about digital asset regulations, and Moreno, a blockchain entrepreneur and luxury car dealer with a compelling sales pitch, aimed to restrict all elected officials and their spouses, as well as federal judges, from participating in digital asset issuance. This would prevent Trump from continuing to endorse the meme coin he introduced shortly before his second inauguration last January, as well as from allowing his wife, Melania Trump, who also has a token, to do the same.
However, Sen. Ruben Gallego, D-Ariz., and Sen. Thom Tillis, R-N.C., later presented an enhanced proposal at the White House that included further stipulations. This new suggestion would require the president to place his crypto assets in a blind trust and divest once these assets reach a specified value, according to two sources with direct knowledge of the discussions, who requested anonymity to discuss confidential negotiations.
This plan would also empower state attorneys general to enforce the law alongside the Justice Department—a crucial component for Democrats who worry about trusting a Trump-appointed attorney general to uphold any conflict-of-interest provision targeting the president.
Theoretically, this proposal could compel Trump to sell off interests in World Liberty Financial, a cryptocurrency business his sons launched in 2024. Trump disclosed over $500 million in revenue from World Liberty Financial’s sales of crypto products, including “governance tokens,” in his annual report submitted to the Office of Government Ethics, representing a notable portion of the over $1.4 billion he reported from crypto ventures last year.
White House shifts stance on Democrats’ ethics proposal
Initially, White House officials voiced concerns about granting state attorneys general the authority to enforce the law, fearing that Democratic attorneys could wield it as a political tool against the president and other GOP figures—as well as Republican attorneys general potentially using it against elected Democrats, according to the two sources familiar with the July Oval Office discussions.
Nonetheless, Trump ultimately agreed to provisions allowing state attorneys general a “meaningful role” in enforcing the crypto regulations should they become law, as noted in a Sunday night announcement by Lummis and Senators John Boozman, R-Ark., and Tim Scott, R-S.C., who are the bill’s main sponsors.
A senior Republican aide shared with reporters, under the condition of anonymity, that Trump had accepted approximately “80%” of the proposal from Tillis and Gallego, emphasizing the state attorneys general provision. An updated version of the bill released on Sunday also mandates either divestment or placement in a blind trust for any “significant” financial interest in entities that issue cryptocurrencies.
Gallego and Tillis, who advocated for additional measures, did not immediately respond to inquiries regarding this latest development on Sunday night.
Trump also accepted a provision permitting state attorneys general to take legal action against a crypto exchange if it lists a digital asset prohibited under the broader bill, according to the aide. His agreement was influenced by multiple discussions emphasizing the significance of passing the crypto legislation, including talks with industry representatives, the aide noted.
For Democrats, incorporating an enforcement mechanism involving state attorneys general had become a non-negotiable condition.
“We need state attorneys general to have the authority to prosecute if the Department of Justice chooses not to,” stated Maryland Sen. Angela Alsobrooks, one of the Democrats viewed as critical swing votes on Tuesday. “I have been very clear that I will not support any legislation lacking ethics provisions,” she added.
Federal ethics laws often exclude presidents
Traditionally, presidents have been exempt from federal conflict-of-interest laws, although some recent presidents have voluntarily put their assets in blind trusts. While cabinet officials can recuse themselves or divest holdings to avoid certain issues within their jurisdiction, it has generally been much more complex for presidents who oversee the entire federal landscape.
A statute enacted last year governing stablecoins, a category of cryptocurrency, prohibited Congress members and their families from profiting from them, but it did not extend to Trump or his family.
“It is indeed the case that conflict-of-interest regulations typically do not apply to the president due to their responsibilities spanning the whole of government,” explained Lisa Gilbert, co-president of the watchdog organization Public Citizen. “However, the unprecedented levels of corruption and conflicts of interest seen from this administration, particularly from Trump, necessitate a different approach.”
The White House insists that the president does not interfere with business decisions made by his sons.
Trump’s evolving stance on cryptocurrency
During his first term, Trump expressed skepticism about cryptocurrency, describing it as “highly volatile and based on thin air.”
However, he has since become a supporter, influenced by his sons’ interest in the field and its resonance with Black voters and younger demographics, who could be vital in closely contested elections.
Cryptocurrency has proven to be more than just a political asset for Trump. His reported $1.2 billion in crypto revenues also included upwards of $600 million from sales of novelty “meme” coins featuring his image through the company CIC Digital LLC.
Last May, Trump hosted leading investors of his $TRUMP meme coin for a dinner at his golf club in northern Virginia, exemplifying how he was blending his presidential responsibilities with his business interests, despite the White House asserting that he attended the gathering “during his personal time.”