In a recent briefing to a mixed audience of policy experts, journalists, and industry stakeholders in Washington, the senior adviser on digital assets to the President highlighted a contentious concession made by the administration in the latest iteration of the so‑called Clarity Act. According to the adviser, the President, Donald J. Trump, agreed to relinquish a set of ethics powers that had previously been described as "historic" in scope, in order to secure a broader legislative compromise that would advance the administration's overall agenda on cryptocurrency regulation and innovation.
The adviser began by contextualising the debate that has surrounded the administration's approach to crypto since it took office. Early in the term, the White House launched an ambitious plan to position the United States as a global leader in blockchain technology, promising to streamline regulatory pathways, protect consumers, and encourage private‑sector investment.
Central to that vision was a suite of ethics provisions that would have granted the President unprecedented authority to oversee conflicts of interest, enforce disclosure requirements for senior officials holding digital‑asset holdings, and impose stricter penalties for non‑compliance. These measures were hailed by some as a bold step toward transparency, while critics warned they could concentrate too much power in the executive branch. When the original draft of the Clarity Act was introduced, it bundled these ethics provisions with a set of market‑friendly reforms, such as clearer guidance for Initial Coin Offerings (ICOs), a streamlined licensing regime for crypto exchanges, and a federal framework for stablecoin oversight. The combined package was intended to deliver both regulatory certainty for businesses and robust safeguards against corruption.
However, intense lobbying from industry groups, coupled with pushback from congressional members concerned about executive overreach, created a stalemate. According to the adviser, the breakthrough came after a series of behind‑the‑scenes negotiations that resulted in a revised compromise language released on the day after the Washington event. The new version retains many of the market‑oriented reforms but strips away the most expansive ethics powers. Specifically, the President no longer holds unilateral authority to order the divestiture of crypto holdings by cabinet members, nor can he unilaterally mandate real‑time reporting of all digital‑asset transactions by senior staff.
Instead, those responsibilities are delegated to an independent ethics commission that will operate under existing statutory limits. The adviser explained that this trade‑off was a calculated decision.
"We recognised that achieving comprehensive regulatory clarity for the burgeoning crypto sector required a level of bipartisan support that could not be secured while the President retained these historic ethics powers," he said. "By ceding that authority, we opened the door to a broader coalition of lawmakers who were willing to endorse the other provisions that will drive innovation and protect consumers." He also addressed concerns that the relinquishment of ethics powers might undermine accountability. The adviser emphasized that the newly established ethics commission will be staffed by career professionals with expertise in financial compliance and will be subject to congressional oversight.
Moreover, existing ethics statutes—such as the Ethics in Government Act—will continue to apply, ensuring that basic transparency standards remain in place. The revised Clarity Act is expected to pass through both chambers of Congress within the next few months, pending further debate.
If enacted, it will create a unified regulatory framework that clarifies the status of digital assets under U.S. law, defines the responsibilities of federal agencies, and sets out licensing requirements for crypto‑related businesses. The act also introduces a pilot program for a federal digital‑currency sandbox, allowing select firms to test innovative products under a controlled environment.
Industry reaction to the compromise has been mixed but generally optimistic. Several major exchanges have issued statements praising the move toward regulatory certainty, noting that the removal of the President's direct ethics authority reduces political risk and creates a more predictable operating environment. At the same time, consumer‑advocacy groups have called for stronger safeguards, urging Congress to consider additional measures that would protect retail investors from fraud and market manipulation. The adviser concluded by reiterating the administration's commitment to fostering a vibrant digital‑asset ecosystem while maintaining the integrity of public office.
He warned that the balance between innovation and oversight is delicate and requires ongoing dialogue among policymakers, industry participants, and civil society. "Our goal is to build a framework that encourages responsible growth, protects users, and upholds the highest ethical standards," he said. "While we have made concessions on certain powers, the core principle remains the same: a transparent, secure, and thriving digital economy for all Americans."