It's called conflict of interest...

Trump crypto empire looms over Senate showdown

The fate of a major crypto bill remains unclear ahead of a Senate vote Tuesday afternoon.

By Jasper Goodman

A landmark effort to remake the architecture of American financial regulation to incorporate the cryptocurrency industry is poised for a dramatic showdown Tuesday on the Senate floor.

Senators are set to vote at 2:15 p.m. on whether to advance the Clarity Act, a 600-plus-page bill that crypto companies have spent years — and hundreds of millions of dollars — lobbying Congress for, in hopes of locking in legal certainty for their business models and legitimizing digital assets.

The outcome remains up in the air. Democratic negotiators are pressing for changes to new text rolled out by Republicans late Sunday, setting the stage for an eleventh-hour scramble for the two sides to strike a deal that would unlock the bipartisan support necessary to advance the bill past a first procedural hurdle on the floor.

Democrats want concessions on several parts of the bill — but most importantly, they say a government ethics provision included in the latest GOP text doesn’t go far enough in restricting President Donald Trump’s ability to profit off his family’s crypto ventures.

The Trump-approved language “leaves a lot to be desired,” Sen. Ruben Gallego (D-Ariz.), who sent a previous ethics proposal to the White House with Sen. Thom Tillis (R-N.C.), told reporters Monday evening. “If they think this is a final deal, it’s not their call.”

The vote will be a pivotal test for a group of about a dozen Democrats who have said they are open to supporting a crypto bill. They face the competing pressures of a left flank that is increasingly motivated against crypto and a massive crypto super PAC war chest that threatens to hurt Democrats if they stand in the way of the industry’s agenda.

Republicans, who characterized the new text they released Sunday as a final offer, hailed their ethics provision, which was blessed by Trump, as a historic concession from the president. It would allow state attorneys general to sue the Justice Department and crypto exchanges for not enforcing the provision — a key Democratic demand — but would not force the president to divest from his crypto ventures.

Democrats sent a counteroffer covering outstanding issues to Republicans late Monday after meeting earlier in the evening in Minority Leader Chuck Schumer’s office.

But it’s unclear how much appetite Republicans will have to negotiate. Sen. Cynthia Lummis, a Wyoming Republican who is leading the charge for the bill, wrote on X Monday: “The time for negotiating is over. Let’s vote.”

At least one Democrat who has been a long-time supporter of the crypto industry wants to advance the bill: Sen. Kirsten Gillibrand of New York is urging other Democrats to vote “yes” Tuesday. Doing so could force Republicans to confront their own whip count challenges — and show good faith to the crypto industry, which controls a massive pile of super PAC money that it is preparing to deploy in the run up to the midterm elections.

But Democrats are increasingly confronting the reality that voting for the bill — even on a procedural step — risks enraging the left. Progressive senators and outside groups are warning against supporting a crypto-backed measure, and saying it must crack down hard on Trump.

Demand Progress Executive Director Sean Vitka took aim at Gillibrand in a statement to POLITICO, writing that the New York Democrat “is supposed to be helping lead opposition to rampant corruption in the Trump administration, yet she’s instead using her position of power as [Democratic Senatorial Campaign Committee] Chair to push other Senate Democrats into supporting bad crypto industry policy that will enrich Trump’s family — and her own.” A Gillibrand aide responded that, rather “than surrender to that status quo, Senator Gillibrand would relish the chance to debate real ethics reforms on the floor — in full view of the public, seven weeks out from the midterms.” (Gillibrand has also previously said she has no involvement in a crypto-adjacent financial exchange that her son is launching.)

The crypto bill is also facing its own challenges on the right, as banks continue to lobby hard for changes that would crack down on crypto companies’ ability to offer rewards programs that pay annual percentage yield to stablecoin holders. Bank trade associations said in a joint letter Monday that they were unmoved by the latest text, and American Bankers Association President Rob Nichols called on every bank CEO in the country to reach out to their senators about the issue.

The GOP supporters of the crypto bill are hopeful that most Republicans will vote to advance the legislation Tuesday. But if they succeed in clearing the first procedural hurdle, they may quickly start shedding GOP support.

“My sense is that most — not all, but most — Republicans are going to vote to get on the bill, and I would include in that number those who have reservations about it and would likely ultimately vote ‘no’ without changes,” said Sen. John Kennedy (R-La.). “But I don’t know what my Democratic friends are going to do.”