A key U.S. digital asset regulation bill, the CLARITY Act, has faced significant opposition. Three Democratic senators — Chris Murphy, Jeff Merkley, and Chris Van Hollen — have spoken out against the current version of the document, arguing that it lacks critically important anti-corruption provisions.
At a press conference on July 14, which also included representatives from the coalitions Americans for Financial Reform and Indivisible, as well as actor and author of "Easy Money" Ben McKenzie, the lawmakers demanded the inclusion of provisions in the bill that would prohibit the president, members of Congress, senior officials, and their families from profiting from crypto businesses.
Corruption Risk as the Main Hurdle
According to Senator Murphy, creating a new regulatory system for cryptocurrencies is pointless if it does not address the conflict of interest stemming from President Donald Trump and his family's direct involvement in this industry. "There is no point in creating a new regulatory system for cryptocurrencies if it does not stop Trump's corruption in this industry," he emphasized.
The senators propose incorporating into the CLARITY Act provisions from the MEME Act or the End Crypto Corruption Act. These initiatives directly prohibit top officials and their immediate relatives from owning crypto businesses, promoting digital assets, or profiting from them. Merkley stated that "it is not enough to prepare an amendment or a separate law against corruption. It must actually be stopped."
Committee Issues and Bill Gaps
Attempts to introduce anti-corruption provisions were already made during the CLARITY Act's review in the Senate Banking Committee. However, the amendments proposed by Democrats were rejected by a vote, and some were deemed improperly drafted by Committee Chairman Tim Scott. Additionally, measures to strengthen anti-money laundering efforts through DeFi, limit insider trading, and expand disclosure requirements disappeared from the final version of the bill.
It is worth noting that the CLARITY Act, in its current form, still aims to create a unified federal regulatory framework. It would delineate the powers of the SEC and CFTC, granting the latter control over spot trading of digital commodities, and introduce a disclosure regime for project developers. However, as Senator Van Hollen aptly noted, "if you are going to draft 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."
What's Next?
Senate consideration of the bill is expected during the week of July 20. It will need 60 votes to overcome the procedural hurdle. The situation is complicated by the fact that CFTC Chairman Michael Selig previously called for expediting the law's passage, threatening that regulators would "write all the rules" themselves if Congress remains inactive. Meanwhile, the White House administration denies any conflict of interest, claiming that the president's assets are managed by trusts.
My analysis: The situation surrounding the CLARITY Act is a classic example of how political interests and personal gain directly influence the shaping of future crypto regulation. The absence of clear anti-corruption barriers not only undermines trust in the bill but also sets a dangerous precedent, where rules for an entire industry could be written to suit one person's interests. Without the inclusion of these provisions, the passage of the CLARITY Act would be not a step forward, but rather a legitimization of conflicts of interest at the highest level.