President Donald Trump's deep financial ties to cryptocurrency are facing renewed scrutiny after the CLARITY Act failed to advance in the Senate.
Industry figures argue that ethics concerns surrounding the president complicated crypto's biggest legislative push.
Did Trump's Crypto Ties Sink CLARITY?
The crypto industry initially directed much of its frustration at Senate Democrats after the CLARITY Act fell short of the 60 votes needed to advance Tuesday.
But a Bloomberg report on Friday highlighted a growing debate within the industry over whether President Donald Trump's own crypto ventures helped turn market-structure legislation into a fight over presidential ethics.
Trump generated roughly $1.4 billion in income from crypto ventures last year.
"The failure of Clarity begins and ends with Donald Trump," Paradigm senior adviser Justin Slaughter told Bloomberg, pointing specifically to Trump's meme coin launch shortly before his inauguration.
Castle Island Ventures partner Nic Carter, a Trump supporter who has criticized the Trump family's World Liberty Financial venture, also said the president "needlessly complicated" the legislative process by intertwining himself and his family with crypto.
Did Democrats Really Drive the Failure?
Swan Bitcoin CEO Cory Klippsten argued that the ethics dispute helped transform the industry's biggest legislative priority into a political fight.
The White House rejected that characterization, telling Bloomberg that Democrats were responsible for the bill's failure and accusing them of putting politics ahead of U.S. technology and innovation.
Trump has repeatedly denied that his family's business interests conflict with his presidential duties.
Ripple CEO Brad Garlinghouse also blamed the "politics of the democrats" as a reason for the failure. He added, "This one stings," arguing that consumers and U.S. competitiveness lost out when the legislation failed to advance.
Still, Garlinghouse said there remains "reason for optimism for crypto in the United States," pointing to continued rulemaking by the SEC and CFTC.
Why Pomp Calls It a Dangerous Game
Sen. Cynthia Lummis (R-Wyo.) said Trump agreed to expanded ethics restrictions and that the final text incorporated more than 120 Democrat-requested changes.
Still, Democratic negotiators argued the provisions did not go far enough on ethics, illicit finance, consumer protection and market integrity.
Bloomberg reported that Fairshake and its affiliates have spent $206 million influencing federal elections since 2024 and had another $123 million in cash through the end of July.
Anthony Pompliano, CEO of ProCap Acquisition Corp., warned that voting down crypto's signature legislation shortly before an election is "a dangerous game to play," pointing to the industry's record of political spending.
