WASHINGTON (AP) — The Senate will decide Tuesday whether to move forward with legislation to create a new regulatory framework for cryptocurrency as the bill teeters in the face of opposition from Democrats who say it doesn’t do enough to rein in President Donald Trump’s personal investments.
The vote on whether to move forward with the legislation is a pivotal election-year test for the $2.3 trillion cryptocurrency market as the industry pushes aggressively for a uniform set of rules. It also comes when cryptocurrency companies have become a major political force, and Trump has amassed significant wealth in crypto while in office.
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While some Democrats are friendly toward the industry and support the idea of a regulatory framework, they are adamant that the bill include strong ethics safeguards to prevent the president and his family from enriching themselves while in office. The opposition appears to have only solidified two months before the midterm elections despite the significant donations that crypto groups have given to some Democrats in recent years.
“Let’s make sure that we do not pass a crypto bill that will let Donald Trump continue to rake in billions of dollars in crypto profits while working families across this country struggle to deal with higher prices and an economy that gets worse by the day,” said Massachusetts Sen. Elizabeth Warren, the top Democrat on the Senate Banking Committee.
Trump agrees to some changes as Democrats push back
As Democrats have threatened to block the bill, Trump has agreed to some concessions on ethics, including new restrictions on federal elected officials from issuing digital assets like the presidential meme coins he and his wife Melania launched before he took office for his second term. He agreed to new concessions on Sunday, such as additional powers for state attorneys general that Democrats had sought to enforce the crypto measures.
Those concessions do not appear to be enough for most Democrats, who say the latest Republican proposal does not have enough enforcement. They also want a requirement for Trump or any future president to divest if holdings reach a certain value.
The latest version of the legislation “leaves a lot to be desired,” said Arizona Sen. Ruben Gallego, who has been in last-minute talks with Republicans on the bill.
Democrats sent a counteroffer late Monday that would expand the ethics provision, according to two people familiar with the negotiations who spoke on condition of anonymity because they were not authorized to discuss them.
But it was unclear if the two sides would be able to reach a deal before the vote Tuesday afternoon. Republicans need Democratic support to win the 60 votes necessary to move forward on the bill in the 53-47 Senate.
North Carolina Sen. Thom Tillis, a Republican who has worked with Gallego to strengthen the ethics provision, said before the vote that he is pleased with Trump's latest concessions and will vote to move ahead.
“We're so close,” Tillis said. “It's just a shame to not take this opportunity.”
Trump has amassed big crypto profits
Trump’s family has raked in big profits in the crypto sector since he was reelected, including the meme coin, announced the day before Trump took office. Top investors were invited to a private reception with the president.
Trump’s family also has a controlling stake in World Liberty Financial, a crypto firm co-founded with the president’s special envoy Steve Witkoff. Trump reported more than $500 million in revenue from World Liberty Financial sales of crypto products, including “governance tokens,” in his annual disclosure report filed with the Office of Government Ethics. That is a significant share of the more than $1.4 billion that the president reported from crypto businesses last year.
A measure enacted into law last year regulating stablecoins, a type of cryptocurrency, barred members of Congress and their families from profiting off them, but it did not extend to Trump or his family.
Legislation aims to give crypto firms legal certainty
Republicans who have been working on the legislation for more than a year say it could stall indefinitely if the Senate doesn’t vote to move forward on Tuesday. The House and Senate will be out of session during October and before the elections, and the dynamics could significantly shift if Democrats win back the majorities of the House or Senate, or both, in November.
Republican Sen. Cynthia Lummis of Wyoming, a lead sponsor of the bill, said that a no vote means ”opposing real ethics reforms on politicians’ personal investments, handing American leadership in digital assets to our foreign competitors, and leaving Americans with zero protections in the digital asset markets.”
Supporters say the legislation aims to give the industry more legal certainty and protect consumers by creating a broad set of guardrails and regulatory requirements, including better enforcement to prevent bad actors and protections to prevent a market collapse.
As talks continued Tuesday morning, Lummis posted on X that it was “now or never for the Clarity Act," referring to the bill's name.
“The time for negotiating is over,” she wrote.
Crypto cash has flooded campaigns
Opponents, mostly Democrats, say the bill is a giveaway to the industry as crypto companies have become generous donors to candidates in both parties around the country.
“It's no secret that they are seeking to ram a bill through Congress based upon not the merits of the bill, but the threat that they will spend even more money in elections against people who vote against it,” said Democratic Sen. Chris Murphy of Connecticut.
In 2024, the crypto industry spent more than $130 million in congressional races, including $40 million in Ohio and $10 million each in Arizona and Michigan.
“DC received a clear message that being anti-crypto is a good way to end your career, as it doesn’t represent the will of the voters,” Brian Armstrong, the CEO of Coinbase, the nation’s largest crypto exchange, wrote in a social media post the day after the 2024 election.
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Associated Press writers Seung Min Kim and Joey Cappelletti contributed to this report.