Democratic senators block the CLARITY Act: Trump's conflict of interest and crypto business under scrutiny
Three Democratic senators — Chris Murphy, Jeff Merkley, and Chris Van Hollen — have voiced strong opposition to the current version of the CLARITY Act. Their key demand: to prohibit the president, members of Congress, senior federal officials, and their families from deriving financial benefits from the cryptocurrency business. This statement was made at a press conference on July 14, which also included representatives from the Americans for Financial Reform coalition, the Indivisible movement, and actor Ben McKenzie, known for his criticism of the crypto industry.
Corruption Risk Instead of Regulation
The senators emphasize that the CLARITY Act, while creating a formal regulatory system for digital assets, completely ignores the glaring conflict of interest related to the cryptocurrency projects of the incumbent president's family. "There is no point in building a new regulatory framework if it does not stop Trump's corruption in this area," Murphy stated, insisting that an anti-corruption block must be an integral part of the law.
Merkley proposed incorporating provisions from the MEME Act or the End Crypto Corruption Act into the CLARITY Act. These initiatives prohibit the president, vice president, cabinet members, congressmen, and their immediate relatives from owning crypto businesses, promoting digital assets, or profiting from them. "It's not enough to just propose an amendment — we need to actually stop corruption," the senator emphasized.
Rejected Amendments and Gaps in Protection
Van Hollen had already attempted to introduce similar restrictions during the bill's consideration in the Senate Banking Committee, but his initiatives were rejected. Some amendments failed during voting, while others were deemed "improperly drafted" by committee chairman Tim Scott. The senator also proposed strengthening anti-money laundering measures in DeFi, expanding disclosure requirements, and imposing restrictions on insider trading — all of which were left out of the approved version.
Supporters of the document, on the other hand, argue that the CLARITY Act already includes disclosure requirements, preserves authorities' powers to combat fraud, and creates uniform rules for the industry. However, as critics rightly note, without strict anti-corruption norms, the law risks becoming merely a tool for legitimizing the personal interests of senior officials.
What's Next? Timeline and Positions of the Parties
The CLARITY Act aims to delineate the powers of the SEC and CFTC, transferring control over spot trading of digital commodities to the latter. The bill is expected to be considered during the week of July 20, and 60 votes will be needed to overcome the procedural hurdle. Earlier, CFTC Chairman Michael Selig and President Trump himself called for expediting the document's adoption, threatening that regulators would "write all the rules themselves."
Interestingly, the White House administration categorically denies any conflict of interest, stating that the president's assets are managed by trusts. However, in my view, this is a classic case where the formal absence of direct involvement does not negate the obvious influence on the regulatory environment. While Congress drags its feet on anti-corruption amendments, the market remains in limbo, and trust in lawmakers is under question.