Crypto bill ethics provision could let Trump defer millions in taxes: Bloomberg

President Donald Trump is reviewing ethics language in a bid to pass broader cryptocurrency legislation — which could result in a personal tax benefit for himself.

Sens. Thom Tillis (R-N.C.) and Ruben Gallego (D-Ariz.) sent Trump ethics language last week requiring him to divest from crypto-related businesses, Bloomberg reported on Thursday, citing people familiar with the matter. That divesture could mean that Trump would not have to pay federal taxes on his gains for years, or potentially ever, and could be worth millions of dollars in tax savings, according to Bloomberg. 

That ethics language is now critical to passing the Clarity Act, the first comprehensive federal crypto regulation. Democrats have long pushed for stronger rules addressing Trump’s crypto holdings, including the TRUMP and MELANIA memecoins launched days before his inauguration and his family’s World Liberty Financial venture.

According to Bloomberg, the latest language also allows state attorneys general to enforce the ethics provision, which is a change some senators have been advocating for. Earlier drafts, including the version Trump signed off on in late July, gave exclusive enforcement authority to the Justice Department, which is led by a presidential nominee, and explicitly barred state attorneys general from acting.

The White House and offices for Gallego and Tillis did not respond to requests from The Block. 

This week is seen as critical for advancing the Clarity Act in the Senate. The Senate is set to leave on Friday for a month-long recess and is then likely to turn most of its attention to November elections, leaving a narrow window for passage of the bill.

As of Thursday afternoon, Senate Majority Leader John Thune (R-S.D.) has not yet filed a cloture vote — a procedural vote that needs to happen before an actual vote on the bill. 

If the bill does get through the Senate, it would have to go back to the House for a vote before going to Trump's desk. The bill needs 60 votes to pass the Senate, requiring Democratic support. Republican support for the bill has also wavered. 

Sens. Josh Hawley (R-Mo.) had said he won't vote for the bill until changes are made to address deposit flight. Sen. Susan Collins (R-Maine) and Lisa Murkowski (R-Alaska) also have concerns about other parts of the bill, according to reporting from Politico. 

In an interview on Thursday morning, Solana Policy Institute President Kristin Smith said it is possible that the Senate stays in Washington until next week, but it really depends on how issues like ethics and DeFi are hashed out. 

"There is discussion about whether they could stay over the weekend to try to get some of these issues done," she said.