President Donald Trump is reviewing a bipartisan ethics proposal that could determine whether the Clarity Act — landmark legislation designed to establish a federal regulatory framework for digital assets and clarify the division of authority between the SEC and CFTC — advances in the Senate next week. According to Crypto In America, the White House received the counterproposal on Thursday morning following weeks of negotiations involving Senator Thom Tillis, Senator Ruben Gallego, and other lawmakers. The proposal introduces an enforcement role for state attorneys general — a priority issue for several Democrats ahead of a potential cloture vote.

Ethics Package at the Center of Negotiations

The latest proposal stems from extended negotiations between Republican Senator Thom Tillis and Democratic Senator Ruben Gallego, both of whom sought a more robust ethics framework than the version previously negotiated between the White House and two Senate Republicans. The ethics provisions carry particular weight given the Trump family's direct involvement in cryptocurrency ventures, including World Liberty Financial, which has drawn scrutiny from lawmakers in both parties over potential conflicts of interest.

The revised measure would empower state attorneys general to sue the Department of Justice if it fails to enforce ethics laws against federal officials. Supporters modeled this provision after the Laken Riley Act, which became law in 2025 and established analogous enforcement authority in immigration cases.

It remains uncertain whether negotiators incorporated additional safeguards to address White House concerns regarding the scope of state attorney general authority. Industry leaders and lobbyists contacted White House officials throughout the week, pressing for an agreement before senators depart Washington on Thursday.

BRCA and Banking Provisions Still Contested

While ethics dominates the discussions, other issues remain unresolved. A Democratic strategist quoted by Crypto In America indicated that Democratic backing also hinges on the Blockchain Regulatory Certainty Act (BRCA) and concerns related to the agriculture section. The BRCA, which would shield non-custodial software developers from certain financial-transmission requirements, has become a flashpoint between crypto industry advocates who argue it protects open-source innovation and law enforcement groups worried about illicit finance gaps.

Earlier this week, the White House and the Treasury Department rejected a proposal backed by Senator Catherine Cortez Masto and two prosecutors' groups. That proposal would have removed language requiring prosecutors to demonstrate that software developers intended to facilitate money laundering before criminal liability could attach.

Treasury Secretary Scott Bessent subsequently defended the BRCA on X, stating that it reflects longstanding Treasury policy for non-custodial developers. The Major Cities Chiefs Association joined several law enforcement organizations in supporting the measure, while the National Sheriffs' Association called for either its removal or narrower language.

Stablecoin Yield Rules Under Examination

Attention has also turned to the Clarity Act's stablecoin provisions. Senators Mike Rounds, James Lankford, and Jerry Moran have expressed concerns that current yield rules may not adequately prevent bank deposit outflows — a reflection of broader tensions between traditional banking interests and digital asset firms competing for deposits.

Some industry lobbyists anticipate further discussions around Section 404, known as the Tillis-Alsobrooks stablecoin yield compromise. State banking officials have also warned Senate leadership that interest-like rewards could reduce local funding available for lending.

Meanwhile, Grayscale Investments urged the Senate to hold a floor vote before the August recess, noting that lawmakers had spent months addressing jurisdiction, investor protections, and developer safeguards through bipartisan negotiations. With the recess looming, the window for a floor vote narrows considerably, raising the stakes for resolving the remaining disputes this week.