CLARITY Act Faces Pushback as Trump Crypto Ties Cited
US Congress is facing renewed pressure over the proposed CLARITY Act after crypto critic Ben McKenzie urged lawmakers to block it, arguing the bill cannot stop “Trump’s crypto corruption.” McKenzie joined Senate Democrats Richard Blumenthal and Chris Van Hollen at a Capitol Hill anti-corruption forum on Monday.
The group says the CLARITY Act contains loopholes. Blumenthal claims Trump made about $2 billion last year, with $1.4 billion tied to cryptocurrency profits, and said the current draft does not require Trump to divest crypto holdings. He also warned that the bill’s ethics provisions would expire in 2029 and enforcement would fall to the Department of Justice, which he called insufficient.
New York Attorney General Letitia James added an investor-protection angle, warning that the CLARITY Act could weaken state oversight of crypto fraud and reduce states’ ability to hold platforms accountable. She called for stronger rules to protect investors and maintain market trust.
In the Senate, Majority Leader John Thune placed the CLARITY Act on hold as the chamber focuses on confirmations and a Russia sanctions bill. That delays crypto legislation, with September now the earliest expected return for consideration—depending on whether Democrats can secure changes before a vote. The Senate would still need at least 60 votes to advance the legislation.
Neutral
The news is mainly about process and politics around the CLARITY Act rather than immediate changes to token issuance, exchange access, or stablecoin mechanics. That keeps the direct market impact limited.
In the short term, high-profile calls to “block” the CLARITY Act—combined with scrutiny of Trump’s crypto ties—can increase headline-driven volatility for US-listed crypto risk. Historically, US regulatory debate (committee holds, amended drafts, delayed floor votes) has often caused brief swings but rarely sustained trends until bill language stabilizes.
In the medium-to-long term, if Democrats secure tighter divestment/ethics and stronger oversight, the market could interpret it as clearer compliance rules, which tends to support sentiment. If, conversely, critics’ warnings prove accurate and oversight is weakened, it could raise perceived regulatory risk.
Since John Thune has put the CLARITY Act on hold and September is the earliest expected return, traders may treat this as a “watch but wait” catalyst: neutral bias, with volatility risk around legislative updates.