White House Bends on Trump Crypto Rules to Save CLARITY Act

The White House accepted what it calls the most extensive federal ethics restrictions ever proposed, trading a concession on President Donald Trump's crypto interests for Democratic votes needed to pass the Digital Asset Market Clarity Act.

Punchbowl News reported Tuesday that White House officials reached an agreement on ethics language during talks with Republican Senators Cynthia Lummis and Bernie Moreno. Neither senator has released the wording or explained how enforcement would work. A White House official confirmed the concession, describing the proposed language as "the most comprehensive and wide-ranging ethics provision in history." The administration had "bent over backward" to address Democratic concerns, the official said.

The agreement removes one of the main disputes holding up the bill. It does not guarantee passage. The Senate has not published its final text or scheduled a floor vote, leaving lawmakers with a limited window before the chamber's August state work period.

Democratic senators have made restrictions on political crypto dealings a condition for supporting the legislation. Elizabeth Warren, Chris Murphy, Jeff Merkley and Chris Van Hollen previously argued that a market structure bill would be "worthless" unless it addressed Trump's links to the digital asset industry. Their concerns include Trump's namesake memecoin and his family's involvement with World Liberty Financial. Democrats have also requested congressional hearings into the president's investments and other crypto connections before the Senate holds a vote.

Details of the White House compromise remain unclear, including whether its limits would cover the president's family and which authority would enforce them. Barron's reported that some Democrats worried enforcement could rest only with the Trump-controlled Department of Justice, not also allowing action by state attorneys general.

Earlier negotiations had shown how difficult the ethics issue could be. Patrick Witt, executive director of the President's Council of Advisors for Digital Assets, told CoinDesk in May that the administration supported rules applying "from the president all the way down to the brand new intern on Capitol Hill," but opposed provisions written against one official or family.

Senate negotiators have resolved or narrowed some other disputes while the ethics talks continued. Coinbase vice chair Ryan VanGrack said Democrats had secured stronger customer safeguards, giving the Senate legislation "more teeth" than earlier versions. "At the end of the day, this is about customer protections," VanGrack said. "The status quo lacks this infrastructure, lacks these protections, and the Democrats used this opportunity, wisely, to make sure that customers were first and foremost in [this bill]."

Stablecoin rewards, anti-money laundering controls, tokenized securities and protections for software developers have also complicated negotiations. The Senate Banking Committee advanced the bill in May with support from every Republican on the panel and Democratic Senators Ruben Gallego and Angela Alsobrooks, producing a 15-9 vote. Gallego and Alsobrooks did not commit to supporting the eventual floor version because negotiations were still underway. Republicans would need to preserve that support and attract more Democrats to reach 60 votes in the full Senate.

The House passed its CLARITY Act version in July 2025 during Republicans' "Crypto Week." The proposal would divide oversight of digital assets between federal regulators and set standards for deciding when tokens fall under securities or commodities rules.

Crypto-linked markets climbed after reports of the White House agreement. Bitcoin traded above $66,000 on Tuesday and reached a seven-week high. Coinbase shares rose about 10%, and Circle gained roughly 7%.

Prediction-market traders remained less convinced. A Polymarket contract shown Tuesday assigned a 48% chance that the CLARITY Act would become law in 2026, down 17 percentage points, with about $2.11 million in recorded volume. The contract's pricing indicated that traders still viewed passage as uncertain despite the reported ethics agreement.

President Trump pressed senators to approve the legislation "in honor of" the late Senator Lindsey Graham, whom he described as a major supporter of the measure. Industry executives, including Coinbase representatives, have also urged Congress to establish federal market rules.

The missing legislative text leaves the effect of the ethics compromise untested. Until Democratic senators review the provision, disclose their positions and help schedule a floor vote, the White House agreement remains a potential route to 60 votes rather than proof that the CLARITY Act will pass.