Some potential clarity on the Clarity Act is sending Coinbase, Circle Internet Corp. higher. Until lawmakers unveil the text -- and Democrats signal they're on board -- it's too soon for investors to celebrate.
A late Monday report by Punchbowl News, citing sources familiar with the matter, said some Republican senators and the White House had come to an agreement on a crypto ethics provision that covered Trump. Reaching a deal on such a provision is seen as a key hurdle to passing the so-called Clarity Act, which would also put most crypto trading outside the purview of the Securities and Exchange Commission, and that firms, including Coinbase, have fought to pass.
The White House didn't immediately respond to a request for comment. In the past, White House officials have said that Trump's investments aren't a conflict of interest.
Coinbase Global stock was up 9.9% to $176.33, while stablecoin issuer Circle Internet Group had jumped 8% to $70.72 in early trading on Tuesday.
The market may be getting ahead of itself. The Punchbowl report said that Democratic lawmakers had not seen the proposed ethics language, and that Sen. Bernie Moreno (R., Ohio) told reporters that the Department of Justice, rather than state attorneys general, would be responsible for enforcing it.
Trump's crypto investments have been seen as a major roadblock to passing the Clarity Act, which would require at least 60 votes in the Senate to avoid a filibuster. Trump's latest financial disclosure form showed that he made more than $1 billion last year from crypto-tied investments, including from World Liberty Financial, which Trump and his family co-founded shortly before his 2024 reelection.
Democratic lawmakers showed deep skepticism of Todd Blanche, Trump's pick to be attorney general, at his confirmation hearing last week. So the fact that the ethics provision could potentially rely on the Trump-controlled Justice Department for enforcement might end up being a deal breaker for some Democrats.
"The lack of state AG enforcement authority may prove to be a hurdle to achieving bipartisan support for the Clarity Act," Compass Point Research & Trading analyst Ed Groshans wrote in a research note on Tuesday.
Lawmakers have little time to reach an agreement. To have time to pass this year, the Senate would likely have to vote on the bill by the end of the month. Congress has a lengthy recess scheduled for August, after which lawmakers will be mostly focused on campaigning in the November midterm elections.
If Democrats won control of either the House of Representatives or Senate in November, they'd likely hold off on passing any major bills until taking control next year.
That Trump is reportedly agreeing to any ethics provision at all is a positive development for the bill's passage, but it's Democrats who will need to give the final nod before the Clarity Act becomes law.
(END) Dow Jones Newswires
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