President Donald Trump has agreed to new ethics provisions, including restrictions on issuing meme coins and potentially placing crypto holdings in a blind trust, to advance a cryptocurrency bill in the Senate. A pivotal vote on the legislation, known as the Clarity Act, is scheduled for Tuesday.
This development comes after weeks of discussions where key senators emphasized that ethical considerations, particularly those affecting Trump, were crucial for the bill's passage. Senators Cynthia Lummis, R-Wyo., and Bernie Moreno, R-Ohio, met with Trump in July to convey that he would need to adhere to conflict-of-interest restrictions to secure Democratic support.
Trump agreed to a measure that would prohibit federally elected officials and their spouses from issuing digital assets. This would prevent him and first lady Melania Trump from launching meme coins, such as the ones they issued as he prepared for a potential second term.
An additional proposal, championed by Sens. Ruben Gallego, D-Ariz., and Thom Tillis, R-N.C., further increased the ethical demands. This proposal would require the president to put cryptocurrency holdings in a blind trust and divest when those holdings reach a certain value. It also grants state attorneys general the authority to enforce the law, a provision sought by Democrats concerned about the Justice Department's potential reluctance to enforce conflict-of-interest rules against the president.
While White House officials expressed concerns about empowering state attorneys general, viewing it as a potential political weapon, Trump ultimately agreed to language that allows them a "meaningful role" in enforcing the crypto measure. A senior GOP aide indicated Trump agreed to approximately 80% of the proposal from Tillis and Gallego, highlighting the state attorneys general provision.
The revised bill, released Sunday, also includes a mandate for officials to either divest or place significant financial interests in cryptocurrency-issuing entities into a blind trust.
For Democrats, the inclusion of state attorneys general in enforcement was a critical demand. Sen. Angela Alsobrooks, D-Md., stated that she would not vote for any legislation lacking robust ethics provisions, emphasizing the need for state attorneys general to prosecute if the Department of Justice does not.
Historically, presidents have often been exempt from federal conflict-of-interest laws, though some have voluntarily placed assets in blind trusts. Unlike Cabinet officials who can recuse themselves or divest from specific issues under their purview, it has been more complex for presidents overseeing the entire government to do so.
Last year's legislation regulating stablecoins barred members of Congress and their families from profiting off them but did not extend to the president or his family. Government watchdog groups have called for a new framework to address what they describe as unprecedented conflicts of interest.
The White House has maintained that the president does not interfere in business decisions made by his sons. Trump himself has previously expressed skepticism about cryptocurrency, calling it "highly volatile and based on thin air." However, he has since become more engaged with the industry, reportedly influenced by his sons' involvement and the sector's appeal to certain voter demographics.
Trump's crypto revenues, amounting to $1.2 billion, include substantial earnings from sales of meme coins featuring his image. He hosted investors of his $TRUMP meme coin at his golf club in Virginia last May, an event the White House stated he attended in his personal capacity.
A Senate vote on the cryptocurrency bill could determine whether the digital asset industry gains wider legitimacy through law or if the industry opts to increase its campaign contributions in the upcoming elections.