Post by @molly0xfff@hachyderm.io

Newsletter: The Clarity Act cryptocurrency market structure bill may well be dead, as the crypto industry has spent $200 million to get a bill too corrupt for Democrats to pass and a president too corrupt to sign anything that might meaningfully limit his grift.

https://www.citationneeded.news/issue-107/

#crypto #cryptocurrency #USpol #USpolitics #CitationNeededNewsletter

Citation Needed

Issue 107 – An unserious offer

The crypto industry has spent $200 million to get a bill too corrupt for Democrats to pass and a president too corrupt to sign anything that might meaningfully limit his grift.

#citationneedednewsletter #cryptocurrency #crypto #uspolitics #uspol

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Molly White

@molly0xfff@hachyderm.io 1 hour ago

Though Republicans and the crypto industry presented the latest draft crypto bill as a viable option after months of disagreements, even the crypto-friendliest Democrats have are opposing its toothless ethics provision that would not meaningfully impact the President’s crypto grift.

#crypto #cryptocurrency #USpol #USpolitics #CitationNeededNewsletter

While some of the bill’s supporters had hoped that resolving the banking–crypto impasse on stablecoin yield [I99, 102, 103] would allow the bill to rocket to the President’s desk, significant disagreements remain. Chief among them is ethics. Senate Democrats — including those who supported the bill’s progression out of the Senate Banking Committee — are insisting on some provisions that would limit the President’s self-enrichment via crypto. The recent release of President Trump’s 2025 annual financial disclosure, which revealed he had made more than $1.4 billion in the last year just from his crypto ventures, has only amplified these demands.

Link card to Citation Needed post titled “Trumps $1.4 billion crypto disclosure”

Republicans and crypto figures initially presented the latest draft, which went public on July 22 after White House sign-off, as a promising path to law. The so-called “compromise” on ethics would bar the president, vice president, and members of Congress from issuing cryptocurrencies, with enforcement delegated to the Department of Justice. — While some of the bill’s supporters had hoped that resolving the banking–crypto impasse on stablecoin yield [I99, 102, 103] would allow the bill to rocket to the President’s desk, significant disagreements remain. Chief among them is ethics. Senate Democrats — including those who supported the bill’s progression out of the Senate Banking Committee — are insisting on some provisions that would limit the President’s self-enrichment via crypto. The recent release of President Trump’s 2025 annual financial disclosure, which revealed he had made more than $1.4 billion in the last year just from his crypto ventures, has only amplified these demands. Link card to Citation Needed post titled “Trumps $1.4 billion crypto disclosure” Republicans and crypto figures initially presented the latest draft, which went public on July 22 after White House sign-off, as a promising path to law. The so-called “compromise” on ethics would bar the president, vice president, and members of Congress from issuing cryptocurrencies, with enforcement delegated to the Department of Justice.

Molly White

@molly0xfff@hachyderm.io 1 hour ago

Ethics enforcement would be left to a DOJ that has shown no appetite for reining in Trump’s corruption. The provision would expire in 2029, and explicitly bars retroactive enforcement against Trump.

Any fine is capped at $500k: less than 0.04% of what the President brought in from crypto last year.

#crypto #cryptocurrency #USpol #USpolitics #CitationNeededNewsletter

But the provision is extremely narrow: it bars the President from issuing tokens while largely leaving untouched his family’s existing web of crypto businesses. It gives him at least a full year to divest or move to a blind trust his stakes in World Liberty Financial and the $TRUMP memecoin.3 And it’s temporary, set to expire on January 20, 2029 — the day a new president takes office. The provision not only fails to establish a standard for future administrations, it shields Trump from future accountability by expressly barring enforcement of penalties for “pre-sunset conduct” after that date. The DOJ enforcement mechanism is entirely toothless. The department is run by Trump appointees who have already shown no appetite for investigating the president’s many conflicts of interest, and is currently headed by Todd Blanche — a former personal lawyer to Trump. Any violations would result in a fine capped at $500,000: less than 0.04% of Trump’s crypto income last year.

Molly White

@molly0xfff@hachyderm.io 1 hour ago

Though Republicans are preemptively pinning blame on Democrats if the crypto bill fails to pass, Democrats are so far holding out for meaningful ethics language, and have suggested that ethics is not their only complaint with the draft legislation.

#crypto #cryptocurrency #USpol #USpolitics #CitationNeededNewsletter

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Democratic lawmakers still hadn’t seen the draft “compromise” the day before it went public,4 but that didn’t stop Republicans and the crypto industry from launching an aggressive PR campaign pressuring them to accept it — while preemptively assigning blame if the bill fails. “If Senate Democrats block this historic legislation after the administration has bent over backward to accommodate their concerns,” one White House source told The Hill, “stakeholders should make no mistake: it is the Democrats who are blocking this legislation because they were never serious about a legislative outcome.”5

Democrats appear unmoved. Senator Angela Alsobrooks (D-MD), one of the two Democrats who voted to pass the bill out of the Senate Banking Committee, has described the DOJ enforcement mechanism as an “unserious offer”.6 Democrats involved in the negotiations have previously insisted on enabling state attorneys general to enforce ethics provisions, and neither side seems willing to budge. Patrick Witt, the executive director of the President’s Council of Advisors for Digital Assets, has shown no sign of yielding, arguing that Democrats who believe an ethics provision without state AG enforcement is meaningless are “basically saying that ALL current federal ethics laws are meaningless because none of them are enforceable by state AGs”.7 Given this administration’s track record on ethics enforcement, he may have a point.

Other Democratic Senators remain firmly opposed. Senators Murphy (CT), Merkley (OR), and Van Hollen (MD) held a press conference last week condemning the bill as “in and of itself a fundamental corruption if it gives Trump’s corruption the power of law.” Merkley added that “there’s a lot more wrong with this Clarity Act than simply the fact that it lacks corruption measures.”8

Image: Senator Chris Murphy (D-CT) speaks at a podium labeled with “Stop Trump’s Crypto Corruption”. Behind him stands Senator Van Hollen (D-MD) and a group of other people.
Caption: Senator Chris Murphy (D-CT) speaks out against the Clarity Act at a July 14 press conference alongside Americans for Financial Reform, Indivisible, and Ben McKenzie (YouTube) — Other Democratic Senators remain firmly opposed. Senators Murphy (CT), Merkley (OR), and Van Hollen (MD) held a press conference last week condemning the bill as “in and of itself a fundamental corruption if it gives Trump’s corruption the power of law.” Merkley added that “there’s a lot more wrong with this Clarity Act than simply the fact that it lacks corruption measures.”8 Image: Senator Chris Murphy (D-CT) speaks at a podium labeled with “Stop Trump’s Crypto Corruption”. Behind him stands Senator Van Hollen (D-MD) and a group of other people. Caption: Senator Chris Murphy (D-CT) speaks out against the Clarity Act at a July 14 press conference alongside Americans for Financial Reform, Indivisible, and Ben McKenzie (YouTube)

Senator Elizabeth Warren (MA) said the bill “does nothing to stop President Trump from making his next $1.4 billion from crypto” and will “supercharge” his crypto corruption.9

Even seven of the Democratic Senators most open to crypto legislation — Alsobrooks, Booker (NJ), Cortez Masto (NV), Gallego, Hickenlooper (CO), Warner (VA), and Warnock (GA) — issued a statement that the draft “as it currently stands falls short”. Ethics, they noted, was only one problem with the bill. “Key provisions including those addressing ethics for elected officials, consumer protection, illicit finance, conflicts of interest and market integrity must be strengthened.”10 They noted that they were still committed to negotiating an acceptable version of the bill, but given this lengthy list of concerns and the dwindling time before August recess, the feasibility of reaching agreement seems doubtful. — Senator Elizabeth Warren (MA) said the bill “does nothing to stop President Trump from making his next $1.4 billion from crypto” and will “supercharge” his crypto corruption.9 Even seven of the Democratic Senators most open to crypto legislation — Alsobrooks, Booker (NJ), Cortez Masto (NV), Gallego, Hickenlooper (CO), Warner (VA), and Warnock (GA) — issued a statement that the draft “as it currently stands falls short”. Ethics, they noted, was only one problem with the bill. “Key provisions including those addressing ethics for elected officials, consumer protection, illicit finance, conflicts of interest and market integrity must be strengthened.”10 They noted that they were still committed to negotiating an acceptable version of the bill, but given this lengthy list of concerns and the dwindling time before August recess, the feasibility of reaching agreement seems doubtful.

Molly White

@molly0xfff@hachyderm.io 1 hour ago

And even Republicans have expressed concerns with the bill, revisiting the issue of stablecoin yield that negotiators thought they had resolved.

The bill needs sixty votes to pass, which would require all Republicans and seven Democrats to sign on.

#crypto #cryptocurrency #USpol #USpolitics #CitationNeededNewsletter

And it’s not just Democrats who may pose obstacles. Some Republicans have also expressed concerns with the draft. Senators John Curtis (UT) and John Cornyn (TX) told Punchbowl News they aren’t happy with the result of the stablecoin negotiations, and remain worried that allowing stablecoin operators to offer yield could trigger deposit flight from community banks. “Crypto is not going to be loaning any money for small businesses,” Cornyn said. “If we’re taking loan capacity away from our banks who are in these communities — I want to make sure that we’re not hurting the very people who rely on these banks.”11 However, he told Semafor’s Eleanor Mueller that it would be “premature” to say whether he would vote against the current draft.12 Republican Senator Bill Cassidy (LA) also intimated that he “might” have concerns with the bill, but did not specify what they were.11

Republicans could force the draft bill to a vote before the August recess, and Majority Leader John Thune has repeatedly hinted he may do just that, but whether even the most crypto-friendly Democrats will support it remains dubious. The bill needs sixty votes to pass, meaning at least seven Democrats must sign on. After that, it would still have to pass the House. — And it’s not just Democrats who may pose obstacles. Some Republicans have also expressed concerns with the draft. Senators John Curtis (UT) and John Cornyn (TX) told Punchbowl News they aren’t happy with the result of the stablecoin negotiations, and remain worried that allowing stablecoin operators to offer yield could trigger deposit flight from community banks. “Crypto is not going to be loaning any money for small businesses,” Cornyn said. “If we’re taking loan capacity away from our banks who are in these communities — I want to make sure that we’re not hurting the very people who rely on these banks.”11 However, he told Semafor’s Eleanor Mueller that it would be “premature” to say whether he would vote against the current draft.12 Republican Senator Bill Cassidy (LA) also intimated that he “might” have concerns with the bill, but did not specify what they were.11 Republicans could force the draft bill to a vote before the August recess, and Majority Leader John Thune has repeatedly hinted he may do just that, but whether even the most crypto-friendly Democrats will support it remains dubious. The bill needs sixty votes to pass, meaning at least seven Democrats must sign on. After that, it would still have to pass the House.

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Molly White

@molly0xfff@hachyderm.io 1 hour ago

If the Senate doesn’t pass Clarity by the start of recess on August 7, its chances become very slim. Future attempts at crypto legislation would not likely be nearly this friendly to the industry — a huge blow after crypto spent $200M+ expecting they could dictate the bill.

#crypto #cryptocurrency #USpol #USpolitics #CitationNeededNewsletter

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If the Clarity Act dies, the crypto industry loses its best chance at a sweeping bill that would lock in the deregulatory gains they’ve achieved through agency capture. The SEC and CFTC are currently run by Trump loyalists who have aggressively rolled back enforcement and reinterpreted their authority to favor crypto, but the crypto industry knows that agency policy can be reversed by the next administration. That’s why they have been so desperate to get the Clarity Act signed into law. Losing it would be a massive blow to the industry after it committed $200 million (and counting) in super PAC spending since 2024, with a sweeping legislative rewrite as a primary goal.

With the Senate only in session for about two more weeks before the August recess, the Clarity Act cryptocurrency market structure bill’s chances of passing are growing slimmer by the day. Any hope of the bill clearing both chambers before August is already dead, given that the House begins its recess session at the end of this week. The Senate has a little longer — until August 7 — although some Senators have already said they will be absent next week to attend the funeral of Senator Lindsey Graham.1

When Congress returns in September, its members will be consumed by the midterms, leaving little time for complex negotiations. The lame duck session follows that: a notoriously challenging time for major legislation. The Clarity Act may well be kaput under this Congress, and the industry-tailored bill will face a significantly more challenging — if not impossible — path to law if Republicans lose their trifecta in the midterms. In May, Senator Cynthia Lummis predicted that if the bill doesn’t pass under this Congress, the next opportunity would likely not come until 2030.2 — With the Senate only in session for about two more weeks before the August recess, the Clarity Act cryptocurrency market structure bill’s chances of passing are growing slimmer by the day. Any hope of the bill clearing both chambers before August is already dead, given that the House begins its recess session at the end of this week. The Senate has a little longer — until August 7 — although some Senators have already said they will be absent next week to attend the funeral of Senator Lindsey Graham.1 When Congress returns in September, its members will be consumed by the midterms, leaving little time for complex negotiations. The lame duck session follows that: a notoriously challenging time for major legislation. The Clarity Act may well be kaput under this Congress, and the industry-tailored bill will face a significantly more challenging — if not impossible — path to law if Republicans lose their trifecta in the midterms. In May, Senator Cynthia Lummis predicted that if the bill doesn’t pass under this Congress, the next opportunity would likely not come until 2030.2

Molly White

@molly0xfff@hachyderm.io 1 hour ago

Also in this issue: Prediction markets continue to be a crypto-esque wild west, with a recent WSJ report exposing the Trump-linked Polymarket’s false advertising. Influencers paid by Polymarket are boasting about manipulating bets.

#crypto #cryptocurrency #USpol #USpolitics #Polymarket #CitationNeededNewsletter

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