U.S. Crypto Legislation Stalls! Trump Family's $1.4 Billion Earnings Spark Conflict-of-Interest Storm

With the U.S. Congressional summer recess approaching, the fate of the Digital Asset Market Clarity Act—hailed by the cryptocurrency industry—now hinges on an unexpected variable: President Donald Trump himself.

This bill, designed to establish a unified regulatory framework for all types of digital assets, was once seen as promising under Trump’s strong endorsement. However, it has now spiraled into a political storm over presidential conflicts of interest, following revelations that the Trump family earned as much as $1.4 billion from cryptocurrency businesses since the start of his second term.

When the Clarity Act was formally added to the Senate agenda on June 1, markets optimistically expected smooth passage. Over the past two months, pressure from banking and law enforcement sectors demanding amendments had been addressed, with disputes over taxation and developer protections resolved. Even the Major Cities Chiefs Association, previously cautious, endorsed the latest version by late July.

However, the situation took a sharp turn following the release of a report by the U.S. Office of Government Ethics. The report revealed that Trump’s income surged by $1.4 billion in his first year of his second term, with the majority stemming from cryptocurrency.

His issued 'Trump Coin' generated $635 million, while World Liberty Financial, led by his two sons, earned nearly $800 million through governance token and stablecoin sales.

What further angered the public was the flip side of this wealth: nearly a million retail investors suffered heavy losses. Data from analytics firm Nansen showed that Trump Coin’s market cap briefly soared to nearly $15 billion before crashing, leaving countless small investors with wiped-out portfolios.

Under public pressure, Trump reluctantly agreed to include an ethics clause in the bill banning federal officials from issuing cryptocurrencies. However, the revised version released by Senate Republicans on July 22 was criticized for leaving a major loophole: while the clause prohibits sitting presidents, lawmakers, and their spouses from issuing or promoting cryptocurrencies, it explicitly excludes officials’ children.

This means Trump’s two largest crypto investments—both initiated before he took office (one launched just 72 hours before inauguration)—are fully exempt from the new rules. Similarly, businesses controlled by his two sons remain outside the clause’s reach.

Democratic Senator Elizabeth Warren stated bluntly that if the ethics clause fails to prevent the president from profiting off crypto or accepting bribes through it, it cannot be called a 'historic breakthrough.'

The draft also allows Trump to continue profiting from his crypto investments during a transition period, requiring him to transfer his holdings into a 'blind trust' within one year. Such trusts are managed by independent trustees; beneficiaries do not intervene in operations nor access investment details, primarily used to prevent conflicts of interest for public officials or corporate executives.

A President Who Knows the Industry: Asset or Liability?

Supporters argue that Trump and his team deeply understand the crypto industry and have indeed pushed favorable policies over the past year: establishing a Strategic Bitcoin Reserve and a U.S. Digital Asset Reserve, and the SEC dropping investigations and lawsuits against over ten crypto firms since February 2025. These moves helped fuel a bull market in crypto.

This 'insider-led governance' logic successfully pushed through the U.S.’s first stablecoin-specific law, the GENIUS Act, in 2025, overcoming Democratic resistance.

But the flip side is growing concern over conflicts of interest. Paul Bratby, founder of UK-based crypto trading signal platform xBratAI, stated that a sitting president profiting over $1.4 billion from an asset class his own government regulates constitutes a classic conflict of interest. Regardless of intent, he warned, such structural issues could undermine public trust in the entire regulatory framework.

Bratby noted that Trump’s holdings span meme coins, NFTs, decentralized finance platforms, and mining company equities—meaning nearly any regulatory decision could personally benefit him.

In Bratby’s view, a truly comprehensive ethics framework should go beyond the current issuance ban to include mandatory disclosure of officials’ digital asset holdings, requiring policymakers to divest or place assets in blind trusts, restricting officials’ relatives from profiting from crypto firms during regulatory periods, and establishing an independent enforcement oversight body. The current version, he said, addresses only a tiny fraction of these needs.

The Legislative Window is Closing

Legal scholar Sun Yuanze analyzed that the Trump camp’s entangled interests are too vast to allow meaningful concessions. With midterm elections less than 100 days away, neither Republicans nor Democrats may be willing to compromise further.

He also noted that the latest draft’s chapter structure suggests supporters may already be planning a fallback: attaching the bill to the federal budget appropriations bill, which must pass by late September. But this path still faces significant hurdles in securing enough support.

Senate schedules are already tight, and by convention, only one controversial bill is considered at a time. With multiple cabinet nomination reviews occupying Senate attention, the Clarity Act’s chances of reaching a vote continue to dwindle.

Despite U.S. Treasury Secretary Besent’s public call on July 30 urging swift Senate action and warning that delays would weaken America’s leadership in fintech, Majority Leader Thune offered no firm commitment, merely stating he would 'see how the votes line up'—without sufficient guaranteed support.

Sarah Binder, political science professor at George Washington University, cautioned that historical trends show the ruling party almost always loses seats in midterms, especially when presidential approval is low. Once Congress fully shifts focus to elections, the Clarity Act’s prospects could dim even further.

Market participants admit that if this bill ultimately fails, the crypto industry’s hopes for comprehensive 'sunlight' regulation may, in the short term, have to rely on the continued implementation of the existing GENIUS Act and individual favorable policies from the SEC and CFTC during their remaining terms.