Why Trump Backed Tougher Ethics Rules in Clarity Act, and Why the Crypto Industry Thinks It Can Pass

President Donald Trump has agreed to a substantial portion of a stringent ethics proposal that is part of the cryptocurrency legislation. The deal was reached after significant deliberations among Republican senators and Democrats. The bill initially included a provision that would prohibit all federally elected officials, their spouses, and federal judges from issuing digital assets.

However, the proposal from Sen. Thom Tillis and Sen. Ruben Gallego, along with other Democrats, was deemed inadequate to address conflict-of-interest issues stemming from Trump's crypto wealth. Tillis and Gallego had demanded the inclusion of language allowing state attorneys general to enforce the law. After much debate, Trump has agreed to about 80% of the proposal, particularly focusing on the state attorneys general provision.

The updated bill will require individuals with significant financial interests in entities issuing cryptocurrencies to either divest or place those interests in a blind trust. Additionally, state attorneys general will be empowered to sue a crypto exchange if they list a digital asset that is barred under the bill.