Next week’s CLARITY Act markup could fall apart over Trump family crypto ethics fight

The CLARITY Act, a bill aiming to define regulatory oversight for digital assets by the SEC and CFTC, is facing a potential setback in its Senate Banking Committee markup. A significant hurdle has emerged in the form of Democratic demands for stringent ethics restrictions on federal officials and elected leaders involved with the crypto industry, particularly concerning the Trump family's crypto interests. Democrats are considering withholding support unless these ethics provisions are included in the committee-approved text, arguing that delaying the issue could allow the bill to pass without adequate conflict-of-interest guardrails. Republicans, however, contend that such language falls outside the committee's jurisdiction. This dispute threatens to shift the focus from technical market structure details to a broader political debate about presidential conflicts and investor protection. The ethics fight is amplified by concerns over the scale of Trump-linked digital asset activity and allegations of the administration rolling back federal oversight. Meanwhile, the bill also continues to face opposition from the traditional financial sector regarding stablecoin rewards, though a recent compromise on this issue has improved its momentum. Despite these challenges, supporters are highlighting public support for crypto legislation and the potential for offshore activity if the US delays. The upcoming markup will be a crucial test of whether the bill can overcome banking industry resistance and Democratic ethics demands to deliver a much-sought federal market structure framework.

(Source：CryptoSlate)