President Trump is pushing the Senate to move the CLARITY Act, but the real fight is not just about crypto rules. It is about whether Washington is willing to write those rules while Trump and his family-linked ventures are still making a fortune from the sector.
- Trump is pressing for CLARITY passage
- Ethics guardrails are the choke point
- Trump-linked crypto ventures are under stress
- Circle and Sony are still getting bank approvals
- Fraud cases and enforcement are not going away
Congress returned to work on Monday, and Trump immediately used Truth Social to call on the Senate to pass CLARITY “in honor of Senator Lindsey Graham.” He also repeated the familiar line that China and other countries want to seize control of crypto and artificial intelligence, turning the bill into part policy, part geopolitical grudge match.
Punchbowl News’ Brendan Petersen said Monday he couldn’t recall Graham “talking about crypto / CLARITY in years, ” which makes the tribute feel less like a legislative signal and more like political theater. The bigger issue is not Graham. It is whether the Senate can move a major crypto market-structure bill without ethics language that directly addresses Trump’s own crypto profits.
For readers new to the jargon, market-structure legislation is the plumbing of crypto policy. It decides which agencies oversee which assets, how exchanges and intermediaries are treated, and where the legal lines are drawn between commodities, securities, and other digital assets. Under CLARITY, the Commodity Futures Trading Commission would take on most of the digital asset oversight.
That kind of clarity would matter. The industry has spent years trapped in regulatory fog, with builders, exchanges, and investors often left guessing which federal cop will show up at the door. A clearer framework could reduce some of that uncertainty. But clarity without credibility is just bureaucratic wallpaper.
That is where Trump’s crypto money becomes the problem.
A 2025 financial disclosure report showed Trump personally earned over $1 billion from $TRUMP memecoin, World Liberty Financial, and other crypto-focused ventures. That figure is enough to make the conflict impossible to ignore. Trump reportedly earned more from crypto last year than any U.S.-listed crypto firm, including Coinbase. That comparison should be read carefully, though. A personal income figure and a public company’s business results are not the same thing. The larger point still stands. The scale is huge.
Democrats are using that reality to push for public hearings into Trump’s crypto profiteering, with particular attention on the $500 million sale of a 49% stake in World Liberty Financial to a fund linked to UAE government officials in January 2025. Whether lawmakers like Trump or not, ethics questions are not some side quest here. They are the central obstacle to a bipartisan deal.
Before Congress adjourned two weeks ago, Sen. Cynthia Lummis said a revised CLARITY text would be released over the break. That did not happen. Reports last week said a new draft included 70 additional pages, but those additions reportedly still did not address the ethics issue. That is the kind of fix Washington loves: lots of paper, no answer to the actual fire alarm.
Several Trump-world figures were quick to retweet the post, including Lummis, Patrick Witt, David Sacks, and Michael Selig. The political message is obvious: keep the bill moving, keep the industry happy, and do not let the ethics fight derail the legislation. That is a nice pitch if you are not the one being asked to certify the fairness of the process.
Trump-linked crypto ventures are not exactly thriving
The policy fight gets sharper when you look at the financial performance of some Trump-linked crypto bets. American Bitcoin Corp, the mining company tied to Trump’s orbit, executed a 1-for-15 reverse stock split on July 2 after its share price fell below $1 in June and stayed there long enough for Nasdaq to warn it had violated minimum bid rules.
A reverse stock split reduces the number of shares outstanding while increasing the per-share price. It does not magically create value. It usually just buys time and keeps a listing from falling apart in public. In ABTC’s case, the company had already seen its shares fall 85% by year’s end. The split reduced outstanding shares from nearly 1.1 billion to about 73 million.
ABTC closed Monday at $5.29, down 13.8% on the day and nearly 38% over the past five days. The company reported an $81.8 million net loss in Q1 after losing $59.5 million in Q4 2024. Its Q2 earnings report is due on August 3. That is not the kind of performance that sells the dream of effortless digital gold. It looks more like a business trying to keep itself upright while the floor keeps moving.
AI Financial Corporation has its own mess to deal with. The company reported a net loss of $271 million in the first quarter and warned there was “substantial doubt” it would remain a going concern within a year. A going concern warning means exactly what it sounds like. Auditors or management think the company may not be able to keep operating normally.
On July 7, Perpetuals.com announced a non-binding term sheet to explore acquiring AI Financial’s profitable subsidiary, Alt5 Sigma Canada, Inc. Matthew Nicoletti said due diligence was ongoing and “no decisions have been made.” On July 8, the Wall Street Journal reported the proposed deal could see AI Financial “sell its core business” for “up to $15 million.”
That is a rough landing for a company whose share price once got a WLFI-fueled pop. Monday’s close was $0.53, down nearly 52% since the year began and far below the nearly $10 peak after last autumn’s World Liberty Financial deal. The company has gone through more identities than a bad con artist: ALT5 Sigma until April, and before that JanOne, with earlier business lines including appliance recycling, biotech, and digital payments.
The World Liberty angle remains politically radioactive. The New York Times previously said $TRUMP memecoin investors collectively lost over $3.8 billion as the token fell 97% from its peak, while Trump earned $635 million in $TRUMP “royalties.” That is the ugly side of branded crypto: the people selling the dream often do very well, and the people buying it often do not.
There is nothing anti-crypto about saying that out loud. It is just honesty. Crypto can be a useful financial rail. It can also be a carnival of greed dressed up as revolution. Both can be true at once. Anyone pretending otherwise is either blind, or selling something.
Institutional adoption is real, even if the politics are rotten
Not everything in the crypto policy picture is a disaster. On July 10, Circle said its First National Digital Currency Bank had received national trust bank charter approval from the Office of the Comptroller of the Currency, and the new institution will operate as Circle National Trust.
Circle CEO Jeremy Allaire called it “a historic day” and “symbolic of a much bigger evolution in the architecture of the emerging internet financial system.” He may have put it in startup gospel language, but the underlying point is not nonsense. A national trust bank charter gives a firm a federally supervised way to handle custody and related services, which can help stablecoin issuers bring reserve assets in-house instead of relying heavily on outside custodians.
Circle says the new bank will initially serve Circle and affiliated entities. Longer term, it aims to offer institutional custody services for digital assets, including stablecoins and tokenized assets. That matters because stablecoins are becoming a serious part of financial infrastructure, not just crypto trading fuel.
Circle shares briefly jumped from $63 to over $73 after the approval, then closed Monday down 4.75% at $63. The company has also had to contend with a new dollar-backed competitor, Open USD’s corporate-friendly OUSDC stablecoin. The market is rewarding regulatory legitimacy, but it is not handing out medals for vibes alone.
Sony is making a similar move. On July 6, Sony Financial Group said its Connectia Trust application received conditional OCC approval. Sony wants to prepare for “the commercialization of businesses related to the issuance and management of U.S. dollar-denominated stablecoins in the United States, ” and it has formed a strategic relationship with Bastion as exclusive stablecoin issuance provider.
Connectia Trust has been established with $40 million in capital, and the first Sony stablecoin is expected next year, pending final OCC approval. That is a serious signal. Stablecoins are no longer just a crypto-native toy; they are becoming a corporate finance tool that major institutions want to control directly.
There is a practical reason for that: custody. Firms do not want to rely forever on third-party custodians such as Anchorage Digital, which received OCC approval in 2021. Bringing reserve assets and stablecoin operations closer to home means tighter control, fewer middlemen, and more power over the rails. The upside is efficiency. The downside is that the same old centralized incentives can come wrapped in blockchain branding.
Enforcement is still alive, even if the tone is softer
The rest of the crypto world is getting a reminder that fraud still exists, no matter how friendly the political climate gets.
On July 7, the CFTC filed fraud charges against Argent Capital Management LLC and its founder Trevor Vernon. The agency says Vernon was running a bogus commodity pool trading equity index futures, options on equity index futures, and crypto assets. In plain English: the operation was allegedly a Ponzi scheme, not a real trading business.
The CFTC said the defendants solicited over $14 million from at least 60 individuals, and that Vernon lied to the agency under oath. The agency also said the trades produced “consistent and catastrophic losses.” That is about as subtle as a brick through a window, and for good reason. Ponzi schemes remain one of crypto’s oldest, stinkiest habits.
On July 10, Bloomberg reported that the U.S. Department of Justice plans to drop charges against Matthew Goettsche, founder of BitClub Network. BitClub is another Ponzi scheme, this one tied to a fraudulent claim that it operated a block reward mining business. Several BitClub principals pleaded guilty to defrauding customers of $722 million.
According to the reporting, negotiations over Goettsche’s case fell apart in February over restitution, then senior DoJ official Aakash Singh brought the parties together to discuss a resolution. Goettsche’s legal team, Bradford Cohen and Brett Tolman, filed a motion in June arguing that his constitutional right to a speedy trial had been violated because the charges were filed in 2019. On July 8, his team told the court there was an “agreement in principle to resolve the pending charges.”
A DoJ spokesperson said the department “routinely evaluates cases that have been pending more than a few years” and that the government would be “recovering a substantial amount owed to investors.” The spokesperson also said the DoJ’s decision “had nothing to do with any alleged pressure by Goettsche’s attorneys.”
Then there is Binance, which is reportedly signaling less willingness to help U.S. investigators move funds fast. The Information reported that a DoJ internal memo warned prosecutors to expect reduced cooperation from Binance in investigations tied to Binance users. The memo, issued last month by DoJ legal adviser Rachel Jones, reportedly said Binance would stop “courtesy” freezes of digital assets unless the DoJ obtained legal authorization, including through mutual legal assistance treaties, or MLATs.
Courtesy freezes are voluntary asset freezes exchanges sometimes do to help investigators stop funds from moving. If Binance really curtails that practice, law enforcement loses a useful tool. Binance denies that anything has changed. A spokesperson told BeInCrypto: “there has been and will be no change to Binance’s cooperation with U.S. law enforcement … Binance will continue to cooperate with U.S. law enforcement requests in connection with their investigations as normal. Any suggestion that Binance has reduced or is reducing cooperation with law enforcement is wrong.”
Binance’s 2023 settlement already required independent compliance monitors from the DoJ and the Treasury Department. In April, the Wall Street Journal reported Binance asked the Treasury Department to rescind or reduce its monitorship. In May, The Information said Treasury officials demanded Binance honor compliance commitments after reports it had dismissed some compliance staff who discovered activity linked to Iranian sanctions evasion. Bloomberg later reported additional departures by staff involved in sanctions, investigations, and financial crime monitoring.
That is not the profile of a company that gets the benefit of the doubt forever. It is a reminder that even the biggest players can still get tangled up in compliance failures, sanctions issues, and trust problems. Crypto did not invent human greed, but it sure gave it better branding.
What this all means
Washington is trying to normalize crypto through legislation, bank charters, and federal oversight. At the same time, Trump-linked ventures keep dragging the sector back into conflict-of-interest swamp water. That tension is now the core political problem around CLARITY. It also explains why Trump Urges Senate to Pass Crypto Bill in Honor of Graham sounds more like campaign seasoning than sober policymaking.
Crypto does need a real rulebook. Builders should not have to guess forever which agency can kill their business model. Stablecoin issuers should have a clear path to custody and compliance. Fraudsters should keep getting chased down. All of that is reasonable.
What is not reasonable is pretending ethics do not matter because the industry wants speed. If Trump is both the loudest cheerleader and a major financial beneficiary, then Democrats are going to insist on guardrails, and a lot of voters will understand why. Markets can tolerate regulation. They cannot tolerate a rigged referee.
Key questions and takeaways
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Why is CLARITY running into trouble?
Because Trump’s personal crypto profits make ethics language politically hard to ignore. The bill can move only if lawmakers are satisfied it does not look like a reward for the president’s own financial interests.
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What does the CLARITY Act actually do?
It sets market-structure rules for crypto, including which federal agencies oversee different kinds of digital assets. In practice, it would give the CFTC a much bigger role. For a blunt breakdown, see The Facts: The CLARITY Act.
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Why does Trump’s crypto income matter?
Because a 2025 financial disclosure report showed he earned over $1 billion from crypto-related ventures. That makes every push for crypto legislation look like it comes with a giant built-in conflict of interest. The brawling over it has already spilled into broader political fights, including Trump and Dimon Clash Over CLARITY Act in U.S. Crypto.
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Are crypto bank charters a big deal?
Yes. They give firms like Circle and Sony a federally supervised path to custody and stablecoin-related services, which could make crypto infrastructure more legitimate and more useful.
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Are regulators still going after fraud?
Absolutely. The CFTC case against Argent and the DOJ movement around BitClub show that scams are still getting attention, even as the broader political tone toward crypto gets friendlier. The same regulatory pressure has also kept the spotlight on high-profile figures, including Changpeng Zhao Seeks Trump Pardon After Binance CEO Guilty and the pushback in Former Binance CEO CZ Denies Trump Pardon Talks Amid Crypto.
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Is Binance likely to stop helping investigators?
Binance says no, but reporting suggests law enforcement may face more resistance around voluntary freezes and user-related investigations. If that proves true, it would matter a lot.
Crypto still has a serious case to make for better rails, faster settlement, and less dependence on legacy gatekeepers. But legitimacy does not come from slogans. It comes from rules that apply to everyone, including the people writing them. And when the political circus gets too loud, it helps to remember that even the crypto regulation battle is still supposed to be about the rails, not the vanity parade.
