Trump agreed to new ethics rules to get a crypto bill across the line. But that might not be enough

WASHINGTON — President Donald Trump had been hearing the message loud and clear for weeks about the sweeping cryptocurrency bill being written in the Senate: to get it across the line, he would have to agree to ethics provisions that apply to him, too.

First, Trump agreed to a measure that would bar him and his wife from issuing the types of meme coins that they swiftly launched as he prepared to return to the White House for a second time. And then another concession came late Sunday, when Republicans said Trump consented to a tougher ethics proposal that several key senators had demanded.

Now, a pivotal Senate vote on the cryptocurrency bill on Tuesday could mark a watershed moment for the $2.3 trillion market — but it hinges mainly on whether those sign-offs from Trump go far enough. That vote could determine whether Washington cements crypto legitimacy into law or whether a frustrated, deep-pocketed industry could unleash even more campaign cash in the midterm elections.

“A vote against the Clarity Act isn’t a principled stand against President Trump," Sen. Cynthia Lummis, R-Wyo., the lead author of the crypto bill, told The Associated Press. "It’s a vote against implementing tough restrictions on politicians for crypto investments.”

Crypto bill's fate hangs on Trump-focused ethics fight

The president has amassed significant amounts of crypto wealth while in office, complicating dynamics for senators drafting legislation to try to bring the fledgling digital assets industry into the mainstream.

With that in mind, Lummis and Sen. Bernie Moreno, R-Ohio, went to the White House for a meeting in mid-July and told Trump that he would have to abide by conflict-of-interest restrictions to get key Democrats on board with the bill.

The president agreed — with surprisingly little pushback, according to two people with knowledge of the Oval Office discussion, who spoke on condition of anonymity to describe the private talks.

The language presented in that meeting by Lummis, a longtime crypto backer steeped in the intricacies of digital asset policy, and Moreno, a blockchain entrepreneur and luxury car dealer known for his persuasive sales pitch, would bar all federally elected officials and their spouses, as well as federal judges, from issuing digital assets. That would mean Trump would no longer be able to sponsor the type of meme coin he launched on the cusp of his second inauguration last January, nor would his wife, first lady Melania Trump, who also has a token.

But Sen. Ruben Gallego, D-Ariz., and Sen. Thom Tillis, R-N.C., then presented an additional proposal to the White House that went further. It would require the president to put his crypto holdings in a blind trust, and divest when those holdings reach a certain value, according to two other people with direct knowledge of the language. They spoke on condition of anonymity to discuss private negotiations.

It would also allow state attorneys general to step in and enforce the law in addition to the Justice Department — a critical provision for Democrats who say they would not be able to trust a Trump-appointed attorney general to enforce any conflict-of-interest provision against the president.

That proposal could, in theory, force Trump to divest from ventures such as World Liberty Financial, the cryptocurrency venture that his sons launched in 2024. Trump reported more than $500 million in revenue from World Liberty Financial sales of crypto products, including “governance tokens,” in his annual disclosure report filed with the Office of Government Ethics — a significant share of the more than $1.4 billion that the president reported from crypto businesses last year.

White House warms to Democrats' ethics idea after initial skepticism

In private, White House officials had raised concerns about giving state attorneys general the power to enforce the law, arguing that Democratic state lawyers could use it as a political weapon against the president and other GOP officials — and that it could be used by Republican attorneys general against elected Democrats, according to the two people familiar with the July Oval Office discussion.

Still, Trump agreed to language that includes a “meaningful role” for state attorneys general to play in enforcing the crypto measure should it become law, according to a Sunday night statement from Lummis and Sens. John Boozman, R-Ark., and Tim Scott, R-S.C., the bill's main authors.

A senior GOP aide, who briefed reporters on condition of anonymity, said the president had agreed to “about 80%” of the proposal from Tillis and Gallego, pointing mainly to the state attorneys general provision. An updated version of the bill released Sunday also includes a requirement to either divest or place in a blind trust any “significant” financial interest in an entity that issues cryptocurrencies.

Gallego and Tillis, the senators who had pushed for additional measures, did not immediately comment on the development late Sunday.

Trump also agreed to language that would allow state attorneys general to sue a crypto exchange if they list a digital asset that would be barred in the overall bill, according to the aide. Trump had been persuaded in part after a slew of conversations about the importance of passing the crypto measure, including with industry officials, the aide said.

For Democrats, an enforcement mechanism involving state attorneys general had been a red line.

“We need the state attorneys general to also have the power to prosecute if the Department of Justice refuses to,” said Maryland Sen. Angela Alsobrooks, among the Democrats seen as vital swing votes on Tuesday. “I have been very clear about the fact that I will not vote for any legislation that does not cover ethics," she said.

Presidents aren't always covered by federal ethics laws

Presidents have often been exempt from federal conflict-of-interest laws, though some other modern presidents voluntarily put assets in blind trusts. While Cabinet officials subject to the laws can recuse themselves or divest holdings to address specific issues under their jurisdiction, it was seen as much more difficult for presidents who oversee the entire government to do the same.

A measure enacted into law last year regulating stablecoins, a type of cryptocurrency, barred members of Congress and their families from profiting off them, but it did not extend to Trump or his family.

“It is true that conflict-of-interest provisions do not commonly apply to the president because of their whole-of-government responsibilities,” said Lisa Gilbert, co-president of the government watchdog group Public Citizen. “That said, we have seen such unprecedented corruption and conflict of interest from this administration and Trump in particular, that we need a different rubric.”

The White House has maintained that the president stays out of family business decisions administered by his sons.

Trump is a relatively recent convert to crypto

In his first term, the president said that he was “not a fan” of cryptocurrency, saying it was “highly volatile and based on thin air.”

But Trump has since become a convert, persuaded by his sons’ interest in the business — and by its appeal to Black voters and younger voters, who could play a crucial role in close campaigns.

Crypto has served as more than just a political boon for Trump. The $1.2 billion in Trump’s crypto revenues also included more than $600 million from sales of souvenir-type “meme” coins stamped with his face through the crypto business CIC Digital LLC.

Last May, the president hosted top investors in his $TRUMP meme coin for a dinner at his northern Virginia golf club, an example of how Trump was mixing his presidential duties with his business ventures despite the White House saying Trump attended the event “in his personal time.”