Trump Adviser Says Democrats Blocked Crypto Bill over Ethics Concerns
White House crypto adviser Patrick Witt blames political opposition and bank lobbying for the Clarity Act's Senate defeat.
Key points
- Patrick Witt claimed the president agreed to two unprecedented ethics provisions for the Clarity Act.
- The U.S. Senate failed to advance the Digital Asset Market Clarity Act last week.
- Witt accused larger banks of starting a wildfire that led community banks to oppose the bill.
Patrick Witt, the White House crypto adviser, defended President Trump’s industry ties on Wednesday. He argued that Democrats turned these ties into a political weapon. This stance followed the recent defeat of the Digital Asset Market Clarity Act in the U.S. Senate.
Witt stated that the president’s cooperation on ethics was unprecedented. He made these remarks at the Financial Markets Quality conference at Georgetown University. The adviser accused Democratic senators of acting disinguously regarding government ethics standards.
Ethics rules blocked the Clarity Act
The Clarity Act failed to advance due to an ethics debate. This debate was separate from the bill’s core market structure provisions. The primary target of this conflict of interest concern was the president.
Witt claimed the president agreed to two unprecedented ethics provisions. These included divesting crypto interests or placing them in a blind trust. The White House was also ready to let state attorneys general sue the federal government.
The adviser called this the most restrictive ethics provision ever agreed to by a president. He noted that banking committee senators hold stocks in companies they regulate. This observation highlighted the irony of the accusations against the administration.
Bank lobbyists fueled the opposition
Witt accused banking lobbyists of helping tank the bill over competitive concerns. He said larger banks started a wildfire that spread to community banks. These institutions feared stablecoin rewards would compete with interest-bearing deposits.
The adviser argued bankers sold a false line of reasoning to smaller banks. He suggested they are now beating their chests over the bill's defeat. Witt stated this behavior reveals the insincerity of their original arguments.
Focus shifts to federal regulators
Witt’s primary role was to get the Clarity Act into law. The Senate failure last week dealt a major hit to that prospect. He stated that the lame duck congressional session is not a significant focus now.
The core work is shifting to federal regulators like the Securities and Exchange Commission. Witt made these comments at a CoinDesk Policy & Regulation event on Tuesday. He emphasized that regulatory action is the next critical step.
