U.S. Senate Democrats negotiating the Digital Asset Market Clarity Act had demanded a section that would apply unprecedented constraints on President Donald Trump's crypto business interests. Trump surprised many by agreeing to certain limits, but the resulting effort revealed this week has been criticized by Democrats as overly flimsy.
Weak or not, the president's concessions would allow the law to tell him what he can't do in the crypto industry, effectively acknowledging that limiting his multi-billion-dollar business is an appropriate ethics measure. Republicans and the White House are reeling to see that concession rebuffed.
It's "exactly what the Democrats have asked for," White House crypto adviser Patrick Witt told CoinDesk. Trump agreed "to subject himself to restrictions on conduct. No other president has done that," Witt contended, and now Democrats are demanding more enforcement powers against Trump.
"I'm sorry, but you don't get to hit two home runs with one swing of the bat," Witt said in an interview with CoinDesk TV.
This negotiation over the government conflict-of-interest piece had delayed progress on the Clarity Act for months — now potentially beyond the window in which it could most easily become law in 2026. This week's release of the final working draft of Clarity included the first ethics language openly circulated, so Democrats are now responding — many of them with disdain.
“Donald Trump raked in more than $1.4 billion from cryptocurrency ventures, and this bill does nothing to prevent him from vacuuming up his next $1.4 billion in crypto profits," said Senator Elizabeth Warren, the Massachusetts Democrat who is her party's ranking member on the Senate Banking Committee, referring to the crypto earnings Trump disclosed for 2025. She said the president will "simply ignore the law" as it's proposed.
So what does the language do? It temporarily bans senior government officials (including the president, vice president, members of Congress and federal judges) from issuing or sponsoring cryptocurrencies.
However, it excuses activity in the past, and there are plenty of crypto business pursuits that don't check the boxes of issuance or sponsorship, so it's unlikely Trump would be forced to abandon some of his most prominent ties, such as his ownership stake in World Liberty Financial. He might have to create some legal distance for himself, such as placing certain investments in trusts that he can't access directly.
Negotiators who were once arguing over whether such an ethics section would be in the bill are now focused on who would enforce such ethics rules. The language puts the federal law in the hands of federal law enforcement: the U.S. Department of Justice, which would not be able to bring a criminal lawsuit or fine a violator more than $500,000. But Democrats had argued that they need state attorneys general to have enforcement powers that can't get stifled by Trump's White House.
Another major narrowing of the limit: It ends at the beginning of 2029, and the next Department of Justice (if it happens to be under the authority of a newly Democratic administration) won't be allowed to pursue any activity happening before its tenure. So Trump could only be pursued by his own DOJ, for which he's nominated his former personal lawyer to run as U.S. attorney general.
It's unlikely that a Trump's loyalist would take a vigorous enforcement stance against their boss, Democrats contend. The president has fired and even directed prosecutions against those who've investigated him in the past.
"This is a non-starter for Democrats, who want state attorneys general to be able to enforce the provision, and it’s the area we expect them to focus most heavily on in negotiations over the coming days," according to an analysis from Beacon Policy Advisors.
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