Trump Relents on Ethics Pledge, **CLARITY Act** Heads to Senate During Window Period

Original Title: "Trump Relents on Ethics Provision, 'CLARITY Act' Rushes to Senate Window"

On July 21, according to crypto reporter Eleanor Terrett citing sources, U.S. President Trump agreed to include an ethics provision in the "CLARITY Act" (Cryptocurrency Legislation Advancing the Reform and Investment for the Development of a Digital Economic Future Act). The White House has reached an agreement on the ethics proposal for the "CLARITY Act," clearing the last major hurdle for this months-long cryptocurrency regulatory legislation tug-of-war. The bill text could be released as early as the same day, but there may be a slight delay; as of the time of reporting, the Democratic side has not seen the specific text.

After the announcement, the probability on Polymarket of the "CLARITY Act" being signed into law in 2026 rebounded to 43%. Research firm Galaxy Research had previously assessed its probability of passing within 2026 at roughly 50/50.

Previously, on July 16, during a meeting between Trump and Republican Senators Bernie Moreno, Cynthia Lummis, and White House Cryptocurrency Advisor Patrick Witt, no immediate agreement was reached, but the agreement was later sealed by the President himself on Monday evening. The provision aims to restrict federal officials such as the President, Vice President, and members of Congress from profiting from digital assets during their tenure, with the core controversy focusing on the Trump family's Meme token and World Liberty Financial. Financial documents revealed last month showed that Trump's crypto income was as high as approximately $1.4 billion, which had at one point stalled the negotiations.

The Final Stretch Before August Recess

If the "CLARITY Act" is ultimately enacted, it will mark the first comprehensive regulation of the digital asset industry at the federal level, clarifying the jurisdictional responsibilities of the SEC and CFTC.

The U.S. House of Representatives had previously passed the bill in 2025 with a bipartisan majority of 294 votes to 134 votes, and the Senate Banking Committee cleared it on May 14 of this year with a vote of 15-9, with the final negotiations now stalled before a full Senate vote.

The bill text is expected to be published in the coming days, followed by a full Senate vote; the window extends only until the first week of August before the recess (the Senate will adjourn on August 7 and will not reconvene until September 14). If passed, it would need to return to the House for reconsideration and merging of texts before finally reaching the President's desk for signature.

The Senate's seat count tightened in mid-July. Republican Senator Lindsey Graham of South Carolina passed away from an aortic dissection on the night of July 11 after concluding his visit to Ukraine. He was 71 years old, and the Republican seats in the Senate temporarily decreased from 53 to 52.

According to the Associated Press, the state's Governor, Henry McMaster, appointed Graham's sister, Darline Graham Nordone, two days later to fill the vacancy. She was sworn in on July 14, restoring the seat.

However, Republican Senator Mitch McConnell has been absent from votes since his hospitalization on June 14. As of July 12, he indicated that he was not ready to return to the Senate, and there have been no further updates on his potential comeback.

Under the Senate's Rule 22 cloture procedure, if Mitch McConnell remains absent, a bill would need to secure at least 8 Democratic votes in addition to the Republican senators present to pass.

Prior to this, Trump posted on Truth Social urging the Senate to swiftly pass the "CLARITY Act," stating that this action was to honor the late Senator Lindsey Graham. He emphasized that this was also about preventing China from gaining dominance in the digital finance and artificial intelligence sectors.

Personnel changes at the White House also reflect the urgency of the agenda. Cryptocurrency advisor Patrick Witt, who was scheduled to be on leave this week for mandatory training with the Georgia Army National Guard, has had his training postponed. He will continue to stay on to advance the legislation. His deputy, Harry Jung, announced his resignation to take effect in two weeks.

Is it the "One-Minute Line" or the "Elephant in the Room"?

The industry's lobbying stance is quite straightforward. Summer Mersinger, CEO of the Blockchain Association and former CFTC commissioner, stated on July 16 at the Injective Summit in Washington D.C. that the core provisions of the bill were "very close to consensus, with only a few details to be finalized," and referred to ethical issues as the "elephant in the room," highlighting it as the current major obstacle.

She called out to Congress, saying, "Whatever decision you make about the ethical provisions, that's really not our concern. That's politics, that's Congress, that's elected officials. But please don't let it blow up all the work we've put into the other parts of the bill."

The Coinbase Vice Chair and former SEC official Ryan VanGrack was more straightforward in mid-July on CNBC: "The CLARITY Act has reached a tipping point, and the momentum for its passage is evident." Senate Majority Leader John Thune, however, gave a more cautious assessment: "There is indeed a path to an agreement, but time is running out."

In essence, these statements convey the same message: We don't care how the ethics clause is written, just don't hold up other parts.

The primary doubts come from the Democratic side, directly criticizing that the ethics clause itself is not sufficient. Senator Chris Murphy, on July 14, posted on Facebook criticizing the CLARITY Act as "a bill supported by the crypto industry aimed at expanding its influence on the banking system and the broader economy," and explicitly demanding that "the bill must have provisions stating that the president and their family members cannot issue cryptocurrency during their term, whether it's a meme coin or a stablecoin... The ethics clause must cover the president and their immediate family members."

Senators Warren, Jack Reed, Chris Van Hollen, and others also jointly stated their position in mid-July, saying they "cannot support the current version of the CLARITY Act," citing reasons such as the need for stronger consumer protection, stricter conflict of interest and ethical rules, and more safeguards against crypto fraud and market manipulation. Senator Mark Warner stated bluntly, "I am very pessimistic about the progress."

Whales, ETFs, and Crypto Treasury Trends

On-chain Whales: According to CryptoQuant's data on July 20, addresses holding between 1000 and 10,000 BTC increased their holdings by approximately 66,700 BTC in a 60-day net accumulation, marking the strongest buying spree since mid-February; meanwhile, medium-sized addresses holding between 100 and 1000 BTC sold about 77,800 BTC during the same period. Data provided by a Bitfinex analyst to CoinDesk showed that whale addresses collectively added over 270,000 BTC worth around $16.7 billion in the first two weeks of July.

Spot ETF: According to SoSoValue's weekly data, the U.S. Bitcoin spot ETF saw net outflows for 8 consecutive weeks starting from the week of May 15, with the most significant outflow occurring during the week of June 26, amounting to $1.79 billion; it only turned positive during the week of July 10, with a net inflow of $197 million, and saw another net inflow of $75.67 million during the week of July 17.

Ethereum Spot ETF Movement Almost Synchronized: Both experienced net outflows for 8 consecutive weeks from May 15 to July 2, but saw net inflows on July 10 and 17, amounting to $84.42 million and $105 million, respectively.

Crypto Treasury: The Strategy fund has maintained a position of approximately 844,000 BTC, with no Bitcoin purchases for two weeks. In mid-July, it raised $2.635 billion in cash through a bond issuance but did not immediately increase its position. The raised funds were allocated as preferred stock dividends and interest buffer. Japanese-listed company Metaplanet increased its BTC holdings by 2,823 coins in the second quarter, bringing its total holdings to 43,000 coins, ranking third among global listed companies. Its subsidiary also secured a convertible bond financing of about $59.5 million on July 21 to continue buying.

BitMine increased its ETH holdings by 7,430 coins last week, reaching a total of 5,777,468 coins, representing approximately 4.8% of the total ETH supply, with 85% already staked. The annual staking yield is about $247 million. The company also conducted a buyback of approximately 5.5 million shares of common stock at an average price of $15.62 per share. Tom Lee stated that the buying pace has slowed, but the weekly acquisitions have continued uninterrupted since the reserve strategy was initiated on June 30, 2025.

Arthur Hayes: According to Ember Monitor, BitMEX co-founder Arthur Hayes used 2.5 million USDC to buy 1,293 ETH on July 15 at a price of $1,933 per ETH. On July 20, he acquired ETH with 2.5 million USDC through FalconX and Cumberland OTC at a price of $1,876 per ETH. These two transactions totaled 5 million USDC for 2,625.7 ETH, with an average cost of $1,904 per ETH. Hayes previously stated that the AI sector is absorbing market liquidity, causing short-term pressure on BTC, but once the liquidity is replenished, the crypto market still has room for a rebound.

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