Senate Democrats block CLARITY Act: Trump's conflict of interest becomes the main obstacle
Democratic Senators Chris Murphy, Jeff Merkley, and Chris Van Hollen have voiced categorical opposition to the current version of the CLARITY Act, a bill aimed at creating a comprehensive federal regulatory framework for digital assets. Their main argument is that the document lacks provisions prohibiting the U.S. President, members of Congress, high-ranking officials, and their immediate relatives from deriving personal profit from the cryptocurrency business.
At a press conference on July 14, which also included representatives from the Americans for Financial Reform coalition and the Indivisible movement, as well as actor and author of the book "Easy Money" Ben McKenzie, the senators emphasized that creating a new regulatory system without addressing conflicts of interest is a sham. "There is no point in creating a new system for regulating cryptocurrencies if it does not stop Trump's corruption in this industry," Murphy stated, noting that an anti-corruption section must eliminate the possibility of the head of state influencing the rules of an industry in which he has direct financial interests.
Merkley proposed including provisions from the MEME Act or the End Crypto Corruption Act into the CLARITY Act. These acts directly prohibit the president, vice president, cabinet members, high-ranking federal officials, congressmen, and their families from owning a crypto business, promoting digital assets, or profiting from them. "It is not enough to prepare an amendment or a separate law against corruption. It must actually be stopped," the senator emphasized.
Van Hollen, who previously proposed similar restrictions during the Senate Banking Committee's consideration of the CLARITY Act, also insists on strengthening measures against money laundering, sanctions evasion, and terrorist financing through DeFi. His amendments, including a ban on insider trading, were rejected or deemed procedurally non-compliant. "If you are going to develop a law on digital assets, it must protect consumers, limit illegal operations, and eliminate conflicts of interest. The CLARITY Act does not address these tasks," he summarized.
Supporters of the document argue that it introduces disclosure requirements, preserves authorities' powers to combat fraud, and establishes uniform rules for the industry. However, the key divide remains: Democrats see the bill as a loophole for enriching the political elite, while Republicans view it as a necessary step for legalizing the crypto industry.
The CLARITY Act, as a reminder, is intended to delineate the powers of the SEC and CFTC, transferring control over spot trading of digital commodities to the latter. Consideration of the document is expected next week, starting July 20. To overcome the procedural barrier, it will need 60 votes in the Senate, which, in the current political climate, seems unlikely without significant concessions.
My analysis: The situation clearly demonstrates that crypto regulation in the U.S. has turned into a political tool. Without clear anti-corruption norms, the CLARITY Act risks becoming not a market safeguard, but a cover for personal interests. The market should be prepared for protracted debates that could delay the law's passage for months.