Senate crypto overhaul stalls as Tillis demands ethics guardrails for White House A key Senate effort to rewrite crypto market rules is at risk after Senator Thom Tillis said he will withdraw his support unless the bill includes strict ethics limits on how federal officials — including those in the executive branch — can engage with digital assets. Tillis, a senior member of the Senate Banking Committee whose backing is crucial as the chamber seeks to reconcile its version of the legislation with the House-passed Digital Asset Market Clarity Act, told Politico: “There has to be ethics language in the bill before it leaves the Senate, or I’ll go from one of the people working on negotiating it to voting against it.” The House bill, approved in July, aims to split oversight between the Commodity Futures Trading Commission and the Securities and Exchange Commission. Senator Ruben Gallego, a Democrat involved in negotiations, echoed that progress hinges on bipartisan agreement over ethics language. “There is no final bill — there is no final movement — unless there is a bipartisan agreement when it comes to the ethics provision,” he told Politico. Why ethics language matters Debate over conflicts of interest has intensified amid Democratic scrutiny of crypto projects tied to former President Donald Trump and members of his family. Critics argue the legislation should bar federal officials from sponsoring, endorsing or issuing digital assets — protections proponents say would prevent memecoin or NFT promotions tied to public office. Senator Adam Schiff, who earlier proposed a blanket ban on federal employees sponsoring or endorsing digital assets, said talks are making headway after months of slow progress. “We’re making progress,” he told Politico, noting negotiations are now narrowing differences as other sections of the bill take shape. Stablecoin yield is another sticking point Separate from ethics concerns, the bill’s path is also slowed by disagreement over whether firms should be allowed to offer yield on idle stablecoin balances. Tillis and Senator Angela Alsobrooks are working on compromise language. Banking groups have warned that yield-bearing stablecoins could siphon deposits away from traditional banks, while crypto firms — including Coinbase — have argued that tight restrictions would stifle market growth and innovation. Those competing priorities have kept stablecoin rules unresolved as the Senate works toward a bipartisan product. What’s next Even with talks underway, the proposal still faces committee hurdles before it can reach the floor. Ethics provisions and stablecoin yield rules remain open, and Tillis’ stance means bipartisan alignment will be essential if the bill is to advance. As lawmakers negotiate, the outcome will shape who regulates crypto, what activities are off-limits for federal officials, and how stablecoins evolve in the U.S. market. Read more AI-generated news on: undefined/news