The future of the CLARITY Act, aimed at regulating the cryptocurrency market in the U.S., may hinge on the Trump administration's response to a new bipartisan proposal concerning ethical issues.
According to cryptocurrency journalist Eleanor Terrett, the Trump administration is reviewing a counter-proposal developed by Republican Senator Thom Tillis and Democratic Senator Ruben Gallego. This proposal would empower state attorneys general to prosecute federal officials if the Department of Justice fails to enforce ethics rules and conflict-of-interest prevention regulations.
The new proposal aims to address concerns raised by Democrats, who fear that relying on the Department of Justice, which is under the Trump administration's purview, to directly enforce ethics rules does not provide sufficient safeguards. A previous draft, backed by the White House, was criticized for leaving enforcement authority with the Department of Justice and for having restrictions that expire in January 2029.
According to Terrett, the White House is expected to review this proposal over the weekend. If the parties reach an agreement on the ethics provisions, a Senate vote on the CLARITY Act could proceed. However, to pass a procedural vote, the bill needs the support of 60 senators, and the necessary backing is not yet secured.
The bill, passed by the Senate Banking Committee with a 15-9 vote, aims to define the jurisdictional boundaries of the SEC and CFTC regarding crypto assets and to establish a comprehensive market structure for the sector. The bill also includes provisions for addressing matters related to stablecoin yields and some legal protections for software developers who do not provide custodial services.
A compromise reached on stablecoin regulation limits interest-like payments based solely on holding tokens, while allowing rewards tied to transactions, payments, loyalty programs, or platform usage. This is an attempt to balance banks' concerns about deposit outflows with crypto companies' demands to preserve their reward programs.
If an agreement on the ethics provisions cannot be reached, progress on the CLARITY Act in the Senate could once again stall, and uncertainty regarding stablecoin reward regulations and the implementation of provisions in the GENIUS Act may persist.
*This is not investment advice.






