Trump concedes on ethics rules, clearing the way for major crypto legislation

The Digital Asset Market Clarity Act, or CLARITY Act, has moved forward after Republican senators submitted the final text over the weekend. This legislation seeks to establish clear guidelines for American cryptocurrency companies by assigning regulation to either the US Commodity Futures Trading Commission or the Securities and Exchange Commission.

The bill, which has been stalled for months, now awaits approval from President Donald Trump after months of negotiations. The previous conflict centered on Trump's financial disclosures indicating substantial crypto-linked income, including his TRUMP memecoin and a decentralized finance venture tied to his family. The final agreement requires federal officials and their spouses to divest significant crypto holdings or place them in a blind trust, while also prohibiting them from issuing or sponsoring digital assets while in office.

State attorneys general will have the power to enforce these rules, a concession previously rejected by the White House due to concerns over potential prosecution of the president. US Senator Cynthia Lummis, a key figure in the Senate's crypto legislation, confirmed that Trump has voluntarily agreed to these new ethics provisions.

Treasury Secretary Scott Bessent had previously urged lawmakers to accelerate the bill's progress. Following the news, Bitcoin experienced a 1.3% increase, reaching roughly $77,700, while HYPE, the token behind Hyperliquid, surged more than 3% to around $80. Hyperliquid operates the largest decentralized exchange for perpetual futures, handling a significant portion of on-chain derivative volume.

Although Wall Street has shown interest, American users cannot currently trade directly on the platform, and legislation clarifying the regulation of decentralized protocols could change that. However, the timing of this vote is uncertain, as the cloture motion only opens debate and requires 60 votes. With Republicans holding 53 seats, at least seven Democrats must back the measure for it to pass.

Senators also note the risk of delaying the legislation until 2030 if no progress is made before the midterm election. Meanwhile, the EU moved ahead with its Markets in Crypto-Assets Regulation, or MiCA, which has been in effect since December 2024. MiCA provides a unified licensing regime across the bloc, while Washington debates jurisdiction.

Asset-referenced tokens and e-money tokens, or stablecoins pegged to currencies or asset baskets, face stricter regulations, requiring issuers to hold reserves, publish a whitepaper, and obtain authorization before market entry. Other tokens, including Bitcoin, are subject to lighter disclosure rules. Exchanges, custodians, and brokers must register as crypto-asset service providers, subject to capital requirements, governance standards, and rules for handling client funds.

MiCA's main advantage for businesses is the ability to operate across all 27 member states without additional approval, similar to European banking and fund management. The European Commission is currently conducting a consultation on the regulation's effectiveness, which closes on September 30.