By: Sanqing, Foresight News
July 21 - According to a report by crypto journalist Eleanor Terrett citing sources, U.S. President Donald Trump has agreed to include ethics provisions in the "CLARITY Act" (Digital Asset Market Structure Act). The White House has reached a consensus on the ethics framework for the "CLARITY Act," clearing the last major hurdle for this crypto regulatory legislation that has been debated for months. The bill text could be released as soon as the same day, though it may be slightly delayed; as of the time of reporting, the Democratic side had not yet seen the specific text.
Following the news, the probability of "the 'CLARITY Act' being signed into law in 2026" on Polymarket rebounded to 43%. Research firm Galaxy Research had previously assessed the probability of it passing within 2026 at roughly fifty-fifty.
Previously, on July 16, during a meeting with Republican Senators Bernie Moreno, Cynthia Lummis, and White House crypto advisor Patrick Witt, Trump did not immediately agree. However, the deal was finalized by the President himself on Monday evening. This provision aims to restrict the President, Vice President, members of Congress, and other federal officials from profiting from digital assets during their terms. The core controversy has centered on the Trump family's Meme tokens and World Liberty Financial. Financial documents disclosed last month showed Trump's crypto income was as high as approximately $14 billion, which had once brought negotiations to a standstill.
The Final Stretch Before the August Recess
If ultimately enacted, the "CLARITY Act" would provide the first comprehensive federal-level regulation for the digital asset industry, clarifying the jurisdictional division between the SEC and CFTC.
The U.S. House of Representatives previously passed the bill with bipartisan majority support in 2025 by a vote of 294 to 134. The Senate Banking Committee greenlit it on May 14 this year with a vote of 15 to 9. It is currently stalled in final negotiations before a full Senate vote.
The bill text is expected to be released in the coming days, followed by a full Senate vote. The window only lasts until the recess in the first week of August (the Senate will go into recess on August 7 and return on September 14). If passed, it would need to go back to the House for reconsideration, text reconciliation, etc., before finally reaching the President's desk for signature.
The vote count in the Senate tightened in mid-July. Republican Senator Lindsey Graham of South Carolina died unexpectedly at the age of 71 on the night of July 11 from an aortic dissection after returning from a trip to Ukraine. This temporarily reduced the Republican Senate seats from 53 to 52.
According to the Associated Press, the state's Governor Henry McMaster appointed Graham's sister, Darline Graham Nordone, to succeed him two days later. She was sworn in on July 14, immediately restoring the seat.
However, Republican Senator Mitch McConnell has been absent from votes since being hospitalized on June 14. As of July 12, he himself stated he was not ready to return to the Senate, and there have been no further updates on his potential return since.
According to the cloture procedure under Senate Rule XXII, if Mitch McConnell remains absent at that time, the bill would need at least 8 additional Democratic votes beyond the actual number of Republican votes present to pass.
Trump previously posted on Truth Social, urging the Senate to pass the "CLARITY Act" quickly, calling it a tribute to the late Senator Lindsey Graham and emphasizing that it also concerns preventing China from gaining dominance in digital finance and artificial intelligence.
Personnel changes at the White House level also reflect the urgency of the push. Crypto advisor Patrick Witt was originally scheduled to be absent this week due to mandatory training with the Georgia Army National Guard. The training has been postponed, and he will remain in place to advance the legislation. His deputy, Harry Jung, announced his departure in two weeks.
"The Goal Line" or "The Elephant in the Room"?
The stance from industry lobbyists is straightforward. Blockchain Association CEO and former CFTC Commissioner Summer Mersinger said at the Injective Summit in Washington D.C. on July 16 that the core provisions of the bill "are very close to agreement, with only a few details left to iron out." She called the ethics issue "the elephant in the room" and the biggest current obstacle.
She urged Congress: "Whatever you decide on the ethics provision, that's really not our concern; that's politics, that's Congress, that's elected officials. But please don't let it ruin all the work we've put into the rest of the bill."
Coinbase Vice Chairman and former SEC official Ryan VanGrack was more blunt in a statement on CNBC in mid-July: "The 'CLARITY Act' is at the goal line. The momentum for passage is clear." Senate Majority Leader John Thune offered a more cautious assessment: "There is certainly a path to a deal, but time is running out."
These statements essentially convey the same message: we don't care how the ethics clause is written, just don't let it hinder the rest of the bill.
Skepticism comes primarily from the Democratic side and directly targets the inadequacy of the ethics provisions themselves. Senator Chris Murphy criticized in a Facebook post on July 14 that the "CLARITY Act" "is a crypto industry-backed bill designed to expand its influence over the banking system and the broader economy." He explicitly demanded that "the bill must have provisions prohibiting the President and his family members from issuing cryptocurrencies during his term, whether Meme tokens or stablecoins... The ethics provisions must cover the President and his immediate family members."
Senators Warren, Jack Reed, Chris Van Hollen, and others also issued a joint statement in mid-July, stating they "cannot support the current version of the 'CLARITY Act'," citing reasons including the need for stronger consumer protections, stricter conflict-of-interest and ethics rules, and more safeguards against crypto fraud and market manipulation. Senator Mark Warner bluntly said: "I am very pessimistic about the progress."
Whales, ETFs & Crypto Treasury Movements
On-Chain Whales: According to CryptoQuant data from July 20, addresses holding 1,000 to 10,000 BTC saw a net increase of approximately 66,700 BTC over 60 days, the strongest wave of buying since mid-February. Meanwhile, addresses holding 100 to 1,000 BTC (medium holdings) sold about 77,800 BTC in the same period. Data provided by Bitfinex analysts to CoinDesk shows that whale addresses collectively added over 270,000 BTC in the first two weeks of July, worth about $16.7 billion.
Spot ETFs: According to weekly data from SoSoValue, U.S. spot Bitcoin ETFs saw net outflows for 8 consecutive weeks starting the week of May 15, with the most severe outflow of $1.79 billion occurring the week of June 26. It wasn't until the week of July 10 that flows turned positive with a net inflow of $197 million, followed by another net inflow of $75.67 million the week of July 17.
The trend for spot Ethereum ETFs was almost identical: also 8 consecutive weeks of net outflows from May 15 to July 2, turning to net inflows in the weeks of July 10 and July 17, with $84.42 million and $105 million, respectively.
Crypto Treasuries: MicroStrategy's holdings remained at approximately 844,000 BTC, with no Bitcoin purchases for two consecutive weeks. In mid-July, it raised $263.5 million in cash through a stock offering but did not immediately add to its position, instead holding it as a buffer for preferred stock dividends and interest. Japanese-listed company Metaplanet increased its holdings by 2,823 BTC in Q2, bringing its total holdings to 43,000 BTC, ranking third globally among publicly traded companies. Its subsidiary also completed a convertible bond financing of approximately $59.5 million on July 21, with plans to continue buying.
BitMine increased its holdings by 7,430 ETH last week, bringing its total to 5,777,468 ETH, accounting for approximately 4.8% of the total ETH supply. Of this, 85% is staked, with an estimated annual staking yield of about $247 million. The company simultaneously repurchased approximately 5.5 million shares of common stock at an average price of $15.62. Tom Lee stated that the buying pace has slowed due to this, but weekly accumulation has never been interrupted since the reserve strategy was launched on June 30, 2025.
Arthur Hayes: According to monitoring by Yu Jin, BitMEX co-founder Arthur Hayes spent 2.5 million USDC to buy 1,293 ETH at $1,933 on July 15, chasing the rally. On July 20, he bought another 2.5 million USDC worth of ETH via FalconX and Cumberland OTC at $1,876. The two transactions totaled 5 million USDC, purchasing 2,625.7 ETH at an average cost of $1,904. Hayes previously wrote that the AI sector is absorbing market liquidity, putting short-term pressure on BTC, but once liquidity returns, the crypto market still has room for a rebound.
