Senator Tillis and Gallego's Ethics Proposal Sent to White House to Decide Fate of Clarity Act
The Trump administration is weighing a bipartisan ethics counter-proposal put forward by Senator Tillis and Congressman Gallego, which would grant state attorneys general the power to sue the Department of Justice if it fails to enforce federal ethics laws for officials.
The Clarity Act, a bipartisan cryptocurrency market structure bill, has passed the Senate committee and includes compromise provisions on stablecoin revenues. Its advancement depends on the White House's response to the ethics proposal this weekend, which will determine whether to initiate a cloture vote.
With events driving expectations for clearer crypto regulation, provisions such as exemptions for non-custodial developer banking secrecy laws could benefit the industry. Otherwise, it may trigger certain provisions of the GENIUS Act, exacerbating uncertainty around stablecoins.
Source: Public Information
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Tillis and Gallego previously promoted bipartisan cooperation during the Clarity Act committee phase. This ethics counter-proposal directly addresses the controversy in the White House's original plan, which only involved enforcement by the Department of Justice and sunset clauses, strengthening checks at the state level.
In terms of resource allocation, the proposal partially delegates enforcement power to state attorneys general, motivated by alleviating Democratic concerns over executive-led enforcement, in exchange for sufficient votes to advance the market structure bill while retaining the stablecoin revenue compromise.
A similar approach can be seen in the Laken Riley Act, where state attorneys general have a litigation mechanism against federal enforcement. This is currently in the final legislative bargaining phase before Congress's recess.
Essentially, this represents a regulatory change: the limitation of federal officials' crypto interests shifts from administrative self-execution to a state-level litigable mechanism, aimed at reducing the capture risk of a single administrative department by decentralizing enforcement power, thereby unlocking broader market structure legislation.
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Decentralization of enforcement power is the true check and balance.
Ethics provisions determine the life and death of legislation.
Weekend responses often determine next week's votes.