Trump's own lawyer used to supervise the ethics of cryptocurrency

The person overseeing Trump's encryption ethics was once his own lawyer

The White House and Senate Republicans have reached an agreement to implement cryptocurrency ethics rules on Trump, but the enforcement power is entirely in the hands of the Justice Department. Responsible for investigating any violations will be Acting Attorney General Todd Blunch, a former personal defense lawyer for Trump who has now joined the administration team.

The actual text of the bill has not yet been made public. What is currently circulating is only the accounts of sources, not the legal provisions themselves.

Bitcoin rose on the news, but Senate Majority Leader Toon still needs to muster 7 to 8 Democratic votes, which he has not yet received.

Once the CLARITY Act becomes law, someone will have to decide who will regulate Donald Trump's cryptocurrency holdings. After months of deadlock, the White House and a bipartisan Senate team finally found the answer: the Justice Department, currently led by Todd Bronch, is in charge. Before joining the administration, Bronch served as Trump's defense lawyer for a long time.

Fox Business Channel host Eleanor Tret was the first to disclose the news. She said she learned from multiple industry sources that the White House had approved an ethics clause of the bill. Wu Banchuan confirmed the report within hours, and Senator Kevin Cramer later confirmed it. The agreement places the same moral restrictions on the president as it does on any federal official, while removing a mechanism that allows state attorneys general to sue when the Justice Department fails to act.

Imagine a whistleblower claiming that the utility structure of a new token directly boosts the value of the president's own equity. Trump's 2025 financial disclosure filed on July 1 showed that his cryptocurrency-related revenue reached US$1.4 billion, most of which was related to World Liberty Financial and a series of memes. Under the current model of enforcing the law only by the Justice Department, the whistleblower has only one door to knock on, and the person behind this door is Trump's former lawyer. Critics believe that an attorney general with a clear political leanings can put complaints on hold indefinitely. Under the state attorney-general mechanism originally requested by Democrats, an attorney-general in New York or California could have completely bypassed the federal deadlock, issued a subpoena and filed a lawsuit under state consumer protection laws or conflict of interest laws. This is exactly the loophole the June compromise sought to close.

Why June negotiations finally broke down

A bipartisan group that included Kirsten Gillibrand, Ruben Gallego, Bernie Moreno and Cynthia Loomis reached a preliminary agreement in June allowing the state attorney general to sue the Justice Department's inaction. But in a closed-door meeting, the White House abruptly backed out, fearing that Democratic attorneys general in states such as New York or California would use the mechanism to conduct targeted litigation rather than actually enforce ethics codes.

Trump met in person with Moreno and Loomis on July 16, along with White House cryptocurrency adviser Patrick Vitter. Both White House Chief of Staff Susie Wells and Vitter said the final text was a substantial concession made by the executive branch. According to reports, Witt deliberately postponed the required training of the Georgia Army National Guard to promote the smooth passage of the bill. This alone is enough to see the White House's priorities for the next two weeks.

Political considerations aside, the CLARITY Act itself is just a fairly routine piece of market structure legislation: regulation of digital commodities rests with the Commodity Futures Trading Commission, and jurisdiction over investment contracts rests with the Securities and Exchange Commission, with a narrower scope. Industry lawyers have been hoping to achieve this division for years. These elements have never been the crux of the negotiations. The ethics clause was later added separately and designed entirely around a person's financial situation, so it is still pending, while the rest of the bill has received support from a bipartisan banking committee since May.

At the same time, the market is not waiting for details. Bitcoin hit a one-month high of $66,500 on the news, or 1.9%, and the spot Bitcoin ETF also recorded net inflows for the fifth consecutive day.

Prediction of bill passage path

Scenario 1: Bipartisan compromise (probability 43%): Republicans allow limited, late-stage state intervention to attract moderate Democrats.

Scenario 2: Pre-recess deadlock (probability of 35%): The Democratic Party prevents the House from deliberating due to transparency issues in the text of the bill.

Scenario 3: The lame duck period is postponed (probability of 22%): The bill is shelved until after the 2026 midterm elections.

The Senate floor has not yet kept pace with market pricing.

The industry doesn't care who enforces it, just wants a bill.

Christine Smith, president of the Solana Policy Institute, has been pushing for an immediate debate on the floor, regardless of how the ethics clause battles end. Her position is straightforward: a unified federal framework deserves any political trade-offs-including ethics clauses. This view is quite common in current cryptocurrency lobbying circles. After years of being subject to enforcement actions by the Securities and Exchange Commission without a clear legal basis, the industry craves certainty rather than a specific form of accountability.

The banking industry has mixed opinions. The American Bankers Association welcomes the bill's bankruptcy protection provisions, which allow institutions to custody digital assets without having to endure the current punitive capital treatment that prevents them from entering cryptocurrencies. But the association has also repeatedly raised another concern, which has nothing to do with Trump's financial situation: Certain language in the bill may allow cryptocurrency platforms to provide benefits similar to bank deposits without the anti-money laundering safeguards that traditional banks must comply with. These industry pressures don't push ethical issues forward, but add another argument: whether enforcement provisions can withstand scrutiny, a bill needs to be passed before recess.

Bronch's Insolvable Vote Problem

The Republican Party currently holds 53 seats, and due to Mitch McConnell's hospitalization, the actual valid number of votes is 52. To break the 60-vote filibuster threshold, Majority Leader John Thune needs 7 to 8 Democratic votes, which currently do not exist. Senators Chris Murphy, Chris Van Hollen and Jeff Merkley have jointly held a news conference to explicitly reject the merged text. Murphy bluntly called the arrangement "a bill that essentially legalizes Donald Trump's cryptocurrency corruption program."

Moderate Democrats facing pressure from the 2026 midterm elections are still under pressure from the well-funded cryptocurrency lobby to break party lines. This is the only real variable in the current equation. TD Cowen's Washington research team warned that without immediate bipartisan momentum, the bill could slip through the August recess and drag it out into 2027. Astraea Law believes that a feasible window for promulgation is around August 2026, but only if the final text attracts enough moderate Democrats.

None of this changes the fact: If six months later, Blanche's Justice Department decides not to launch an investigation and no one outside of Washington will ever hear about it, then nothing will change.