Crypto Industry's Deregulation Push Hits Roadblock Over Trump Conflict of Interest

Crypto industry super PAC Fairshake had almost $127 million cash on hand at the end of June, second among outside campaign groups only to the Senate Leadership Fund. The crypto industry has spent a total of $322 million on House and Senate races this year, including $189 million in direct spending.

The passage of the GENIUS Act last year was seen as a major victory for the crypto industry, with its light-touch regulatory structure for stablecoins drawing digital assets further into the traditional financial world. However, the industry's next target, the Digital Asset Market Clarity Act, is stalled in the Senate.

The CLARITY Act aims to create a deregulatory market structure framework, but its progress has been hindered by concerns over deposit flight to stablecoin issuers and a lack of anti-fraud and anti-money laundering protections. Moreover, a new draft of the bill includes an ethics provision that would allow President Trump to continue engaging in crypto-related activities while in office.

The proposed language prohibits government officials from issuing or sponsoring digital assets during their term but gives exclusive enforcement authority to the U.S. attorney general, excluding state attorneys general and private actors. Critics argue that this is woefully inadequate, as it would only result in a fine of $500,000 for any violations.