Blumenthal: Trump 'Exploiting' Crypto Loopholes — Demands First Family Divest All Digital Assets

Sen. Richard Blumenthal (D-Conn.) on Tuesday accused President Donald Trump of exploiting gaps in cryptocurrency oversight and urged mandatory divestment of digital assets by the First Family and federal officials. Blumenthal said the current draft of the Clarity Act does not do enough to close "legal loopholes" or strengthen enforcement against crypto-related abuses.

What Blumenthal Said

Writing on X, Blumenthal called for "real" safeguards rather than what he described as "smokescreen steps" in the Clarity Act. He posted video remarks from a public forum in which he warned:

"Crypto is now in a kind of enforcement nether world where we depend on laws that were not designed to protect against crypto abuses."

In his post he added:

"Trump is exploiting legal loopholes & enforcement weaknesses that cry out for reform—real safeguards, not smokescreen steps in the Clarity Act. For starters, require Trump & his family & all officials to divest all digital assets."

Where the Clarity Act Stands

Senate action on the Clarity Act slowed as lawmakers focused on federal nominations and a separate Russia sanctions bill ahead of the August recess, which begins Aug. 8. The measure still lacks the votes needed to advance.

Last week, Senate Republicans released an updated draft of the Clarity Act that adds new ethics language. The draft would bar federal officials — including the president and vice president — from "issuing or sponsoring" digital assets for profit while in office. It also would require covered officials to either divest their crypto holdings and related investments, place those assets in a blind trust they do not control, or both.

Senate Democrats — who spent months negotiating the bill — issued a joint statement saying the latest draft "falls short" on ethics and conflicts-of-interest protections. Sen. Elizabeth Warren (D-Mass.) specifically argued the revision does not adequately address alleged cryptocurrency profiteering by President Trump.

Market Odds And Wider Reaction

Prediction market Polymarket priced the chance the bill becomes law in 2026 at 32% at the time of reporting, down from 47% the prior week. Lawmakers such as Sen. Cynthia Lummis have argued that crypto legislation could also strengthen sanctions compliance against North Korea-linked hackers and other bad actors.

The debate highlights ongoing tensions in Congress over how to regulate digital assets, balance innovation with consumer protections, and address conflicts of interest involving public officials.