Sen. Richard Blumenthal (D-Conn.) on Tuesday accused President Donald Trump of exploiting cryptocurrency regulatory gaps, arguing the Clarity Act in its current form does not do enough to prevent abuses.

Clarity Act Needs Real Safeguards, Says Senator

Blumenthal stated on X that existing "legal loopholes" and weak enforcement need "real" safeguards, not "smokescreen steps" in the Clarity Act.

Blumenthal, Ranking Member of the Senate Permanent Subcommittee on Investigations, said Trump is "exploiting" these gaps, and demanded mandatory divestment of cryptocurrencies by Trump, his family, and officials.

The Senator posted a video of his Tuesday statement at a public forum on Trump's alleged cryptocurrency corruption, where he said, "Crypto is now in a kind of enforcement nether world where we depend on laws that were not designed to protect against crypto abuses."

Crypto Bill Not a Priority for Senate?

The remarks come as the Senate moved the Clarity Act to the back burner, spending its final pre-recess days on federal nominations and a Russia sanctions bill instead. The Senate breaks for recess on Aug. 8, and the bill still doesn't have the votes.

Last week, Senate Republicans released an updated draft of the Clarity Act with new ethics provisions that prohibit federal officials, including the president and vice president, from "issuing or sponsoring" digital assets for profit while in office.

The draft also requires covered officials to divest their holdings and any investments in cryptocurrency ventures, place such assets into a "blind trust" that they do not control, or take both actions.

Senate Democrats, however, who spent months negotiating the bill, said in a joint statement that the latest text "falls short" on ethics and conflicts of interest. Sen. Elizabeth Warren (D-Mass.) has argued that the updated act fails to address Trump's cryptocurrency profiteering.

Polymarket prices the odds of the bill becoming law in 2026 at 32% as of this writing, down from 47% the week before.