Crypto Corruption Loopholes: Why the Clarity Act Falls Short
We are facing an unprecedented series of conflicts of interest in the White House.
By Brian Frosh
The Constitution makes clear that the presidency is a position of public trust, not a platform for private profit. In 2017, Maryland and the District of Columbia filed the first-ever lawsuit against a sitting president for violating our nation’s original anti-corruption law: the Emoluments Clauses of the U.S. Constitution. Nine years later, we seem to have entered an era of hyper-grift in the market for cryptocurrency.
Legislation pending in the U.S. Senate (incorporating elements of the House-passed Clarity Act) purports to bring order to the volatile world of digital assets. But the bill as it was recently approved by the Senate Banking Committee would be a gift to those who would use their positions to put their personal portfolios above the public interest.
To protect our democracy and our economy, the Senate must use this opportunity to close the gaps in this legislation. Congress must ensure that there are enforceable ethics rules that guard against the corruption of public officials.
We are facing an unprecedented series of conflicts of interest: President Trump and his family have built a sprawling crypto business that has added more than a billion dollars to the family’s fortune since Trump took office. Meanwhile, as officials from his own administration and their allies in Congress are drafting the very laws and regulations that will govern this industry, the Trumps’ businesses are issuing stablecoins and hawking Trump meme coins. As the New York Times put it: “Mr. Trump is now not only a major crypto dealer; he is also the industry’s top policy maker.” Sanctions must be put in place to deter this kind of conflict of interest among public officials.
Without strict ethics provisions, we are flying down what has been aptly described as a “superhighway” for corruption. The absence of meaningful guardrails provides a pathway for foreign governments and illicit actors to gain leverage over a sitting president or members of Congress. This isn’t just business as usual. It is a national security risk.
We need a gold standard for ethics: a total prohibition on government and elected officials profiting from, issuing, or sponsoring crypto tokens while in office. To safeguard the public trust, the rules must be written to protect the public’s financial security, not the profits of the powerful.
Under the Bank Secrecy Act and Anti-Money Laundering regulations, banks are required to know their customers, monitor transactions, and report suspicious activity. Those same standards should apply to every entity moving money -- including decentralized finance (DeFi) crypto platforms.
Unlike traditional banks or even centralized crypto exchanges, DeFi platforms have no company behind them, no headquarters, and no operator to hold accountable. They run entirely on automated software that executes transactions without human oversight or any requirement to verify who is on either end. There is no one to call. No one to subpoena. No one watching.
The FBI reported over $11 billion in cryptocurrency-related fraud losses in 2025 alone, a more than 20% increase from 2024. DeFi platforms are increasingly the path of least resistance for moving dirty money.
Every entity moving money should play by the same rules. No exceptions. No carveouts. Not for anyone.
Sen. Chris Van Hollen (D-MD) authored an amendment that would have addressed the ethics concerns I laid out, but it was rejected by the Republican majority. Nevertheless, there is still time to fix the bill on the Senate floor and include the anti-corruption guardrails our financial system demands. The public deserves a government that is accountable to the people, not one that is for sale on the blockchain.
Brian Frosh is a former Maryland attorney general.
The time to enact guardrails was BEFORE the 2024 election. If Congress had sent a clear message that Trump’s grift would not be tolerated, the presidency might not have looked so attractive to him the second time around. It’s not as though Trump ever pretended to be something he is not - an honest man. His first term gave us a road map for how a greedy, dishonest president could exploit the office. All Congress needed to do was follow it. Now it’s too late. So much for electing representatives with good judgment.
I agree completely with your anti-corruption point here. But even if money laundering and Trump style self-dealing are blocked, the rest of the bill is a green light for crypto to not meet the standards banks do to protect the economy and financial integrity. The obfuscatory Clarity Act would still be a gift to the grifters.