David Nage, portfolio manager at Arca, stated that the final hurdle facing the CLARITY Act may have less to do with crypto regulation and more to do with ethics provisions tied to elected officials and senior government leaders.
“Three Mechanical Things“
In an X post on June 16, Jeff Dorman, CIO at Arca, cited Nage, who revealed that after spending a week meeting lawmakers and congressional staff in Washington, the core policy framework behind digital asset market structure legislation is largely complete.
“We are very close,” Nage wrote. “Call it 80%–85% finished.”
The House passed the CLARITY Act in July 2025 and Senate Banking Committee advanced its version in May by a 15-9 vote. But the bill currently sits on the Senate calendar awaiting further action.
Nage highlighted three major items remain before the legislation can reach the Senate floor:
- Merging the Banking Committee and Agriculture Committee versions of the bill.
- Resolving concerns surrounding decentralized finance developer protections.
- Finalizing ethics and conflict-of-interest language.
He also argued that one of the most contentious issues earlier this year, stablecoin yield, has largely been resolved.
Ethics Provision Emerges As Key Sticking Point
Nage believes the real fight centers on ethics rules designed to prevent elected officials and senior government leaders from profiting from crypto businesses they oversee.
The issue has become politically sensitive because of scrutiny surrounding President Donald Trump’s family crypto ventures, including World Liberty Financial and other digital asset projects.
A Senate Banking Committee amendment introduced by Sen. Chris Van Hollen (D-MD) that would have prohibited the president, vice president and members of Congress from participating in crypto businesses failed in committee.
However, Nage noted that Republicans largely opposed the amendment on procedural grounds rather than debating the substance of the proposal.
According to Nage, Senate Democrats are unlikely to provide the votes necessary to clear the chamber’s 60-vote threshold without stronger ethics safeguards.
The White House has reportedly pushed back against provisions perceived as directly targeting President Trump. That standoff has become the central obstacle in negotiations, Nage argued.
Proposed Compromise
Nage’s proposal would prohibit crypto business activity across the board for the president, vice president, senior executive branch officials and members of Congress.
He expects Senate negotiators to continue working through ethics and enforcement language over the coming weeks.
His base-case scenario calls for a merged Senate package by late June or early July and Senate floor vote in mid-to-late July. Also, he sees a final enactment before Congress leaves for its August recess.
“The substance is done,” Nage wrote. “What’s left is a political optics problem.”
Image: Shutterstock
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