Republican Senator Thom Tillis has threatened to vote against the Clarity Act unless it includes conflict-of-interest provisions, adding a new complication to the crypto bill already faced with significant headwinds.
• Why It's a Problem: The ethics provisions Tillis is pushing would likely apply to the Trump family's crypto business interests, making them politically difficult to pass.
• Tillis's Leverage: Tillis has a notable influence over the Clarity Act's outcome. He was a central negotiator on the stablecoin yield issue and last week asked the Senate Banking Committee to delay a markup, essentially a signed-off revision, on the bill until May. Investment Bank TD Cowen noted Tillis recently won a standoff with Trump over the Federal Reserve, suggesting he may be emboldened to stand his ground.
• The Conflict-of-Interest Bind: Crafting ethics provisions that satisfy Tillis and Democrats without affecting Trump's existing crypto interests is a narrow needle to thread. Applying rules only after the next presidential inauguration would sidestep the Trump family issue, but TD Cowen said Democrats and Tillis are unlikely to accept that approach.
In recent weeks, progress for the Clarity Act has continued to stall over the subject of "yield" - among others - missing its informal April 25 deadline. Prediction market odds are sliding, and a recent Galaxy report puts passage at roughly a coin flip.
Up until now, questions of ethics have been primarily a hangup for Democrats. As Politico calls out, Tillis marks the first Republican-voiced objection rooted in Trump family conflicts of interest. That's a harder problem to paper over. If ethics provisions make it into the bill, Trump's willingness to sign it becomes an open question.