This loophole in the US crypto law could derail everything

The American crypto law that was supposed to finally “put things in order” today looks like a rocket ready to launch… with a stuck pin. This pin is an ethics clause. And it might be enough to derail the whole rest. In short: Democratic senators demand safeguards against conflicts of interest. Without that, they threaten to withdraw their votes. Ruben Gallego even talks about a “red line”.

The small line that annoys: ethics before technology

On paper, the project seems technical: defining who regulates what, and giving more clarity to the crypto market. But the battle has moved elsewhere: who benefits from the law while it is being written.

The core of the blockage is simple to understand. Democrats want to prevent public officials, including the president, from deriving direct or indirect benefit from ties with crypto companies or projects affected by the future regulation. Not to mention that the 2026 US midterm elections could block Trump’s agenda.

This is not a whim that came from nowhere. Adam Schiff had already introduced in 2025 a proposal dedicated to these issues (the COIN Act) to limit “financial exploitation” of digital assets by officials and their close ones. The idea: to cut short the temptation of “I legislate, I earn.” And this is where it gets explosive. Because a market law, without political trust, is just a well-formatted draft.

Why this loophole could bring down the whole castle

We are talking here about a “crypto market structure” text, in other words the framework: classification, supervision, responsibilities. The House has already made progress by adopting the Digital Asset Market Clarity Act (CLARITY Act) on July 17, 2025 (294–134), then the text was received in the Senate on September 18, 2025.

However, in the Senate, the schedule has been disrupted by pure politics. Discussions suffered the shock of a 43-day federal shutdown in the fall of 2025, which slowed or froze a lot of legislative work.

Today, the chairman of the Senate Banking Committee, Tim Scott, mentioned a markup (the step where amendments are made and voted in committee). But there was public confusion about the scheduling at the time of the initial statements.
Translation in Washington language: if the majority wants to move fast, it must secure votes. And if some Democrats say “no ethics clause, no vote”, everything can block again.

The most ironic thing is that this ethics battle is not a “moral bonus.” For crypto, it is almost the main topic.

What crypto really risks: a law, then a permanent suspicion

The crypto sector has been demanding regulatory clarity for years. But a law passed with the scent of conflict of interest attached to the paper is a poisoned gift. Because it becomes attackable: politically, in the media, legally.

It is also a matter of lifespan. The American crypto texts are already subject to electoral weather. Add to that a symbolic element: Cynthia Lummis, a pro-crypto figure and historic supporter of the approach, is not running again and will leave the Senate in January 2027. The political backing can therefore change hands, thus the tone.

Finally, this “loophole” reveals a truth many refuse to face: crypto does not only have a rules problem. It has a narrative problem. When the general public believes the game is rigged, they don’t read legal definitions. They disengage.

If Congress wants a law that holds up, it will have to decide: either ethics remains a convenient blind spot, or it becomes the seatbelt of the text, the one that prevents it from exploding at the first political turbulence.

And while Washington debates safeguards, France reminds of another, more down-to-earth reality: trust is not only lost in legislative chambers. Tax authorities may have compromised the confidentiality of some crypto holders, and such suspicion is enough to chill an entire market.