Clarity Act Bogged Down in the Senate as Wall Street Brings Retail Crypto Trading to the Masses

The White House said May 4 it wants Congress to deliver the Clarity Act to the president's desk before July 4. The cryptocurrency market-structure bill cleared the House in July 2025 by a 294–134 vote, but has been stuck in the Senate for nearly a year. Sen. Tim Scott's Banking Committee is targeting completion of markup within May, setting up a possible full Senate vote in June or July. The main obstacle is an "ethics clause" sought by Democrats that would bar senior government officials from personally profiting from crypto assets while in office—a provision widely viewed as aimed at the president. While Congress debates, Wall Street is already moving. On May 6, Morgan Stanley unit E*Trade began spot trading in Bitcoin, Ethereum and Solana for its 8.6 million retail clients, charging a 0.50% fee. BeInCrypto said that is currently the lowest retail crypto fee among major traditional Wall Street brokerages. Fee compression has accelerated as incumbents enter the market en masse in April–May 2026—well before the Clarity Act becomes law. A brief timeline: • Feb. 22, 2018: Robinhood becomes the first retail online brokerage to add crypto trading, launching with zero commissions (including spreads). • 2018: Coinbase rolls out its retail app, charging 0.99% to 2.99% plus a 0.5% spread. • 2022: Coinbase introduces Advanced Trade, cutting retail fees to roughly 0.40% to 0.60%. • 2023: Fidelity Crypto launches with a 1% fee. • Early April 2026: Charles Schwab launches Schwab Crypto, gradually opening spot trading for Bitcoin and Ethereum at a 0.75% fee. • May 6, 2026: E*Trade follows at 0.50%, adding Solana alongside Bitcoin and Ethereum. A side-by-side comparison shows the pressure on pricing. Coinbase's standard app typically costs retail users 0.99%–2.99% plus a 0.5% spread, for an effective 1.5%–3.5%. E*Trade's 0.5% is about one-third of that. Fidelity's 1% is the priciest among the traditional entrants. Coinbase Advanced Trade remains competitive on price, but it is built as a professional interface for high-frequency and high-net-worth users rather than a default option for average retail investors. Why the cluster of launches in April–May 2026? Two policy milestones reduced perceived regulatory risk. First, the GENIUS Act—a stablecoin framework—was signed into law in July 2025, giving traditional institutions a clearer route to custody and settle stablecoins. Second, the Clarity Act is approaching Senate markup; even without a final vote, the market is treating the broad direction of U.S. crypto regulation as increasingly legible. Firms are acting on the probability of passage rather than waiting for a signature. The ethics clause, and why it matters Democratic lawmakers have repeatedly pushed ethical restrictions since 2025; the White House has repeatedly rejected them. The stakes are concrete. Bloomberg reported in January 2026 that roughly one-fifth of the Trump family's $6.8 billion fortune is tied directly to cryptocurrency projects. Realized cash flow totals about $1.47 billion, primarily from four sources: • World Liberty Financial (WLFI) token sale: about $1 billion in profits as of December 2025, including $550 million raised in a public offering. • $TRUMP memecoin: launched three days before the January 2025 inauguration, generating $362 million in fees and trading profits. • $MELANIA memecoin: about $65 million. • USD1 stablecoin reserve interest: $42 million. Unrealized valuation totals about $2.8 billion: • WLFI holds $1.5 billion of unsold tokens on its books, highly sensitive to WLFI price moves. • FinanceFeeds estimates Trump Media's Bitcoin reserves at 9,500–11,500 BTC, worth roughly $840 million at current prices. • USD1 business valuation plus equity stakes such as American Bitcoin Mining total about $460 million. Together, realized and unrealized amounts sum to roughly $4.3 billion—the economic exposure sitting behind the ethics debate. A version backed by Sen. Elizabeth Warren and others explicitly stated: "Prohibiting current senior officials from personally profiting from cryptocurrency assets during their tenure." A compromised version was sent to the White House and returned. Whether the bill reaches a floor vote with an ethics provision may come down to a stark political calculation: will senators publicly vote to cut about $4.3 billion tied to the president's family? What the Clarity Act would do The Clarity Act would codify federal jurisdiction by placing digital assets into three categories: 1) "Digital commodities," overseen by the CFTC. These correspond to tokens running on "mature blockchain systems." Maturity requires two conditions: (i) the network is fully functional and capable of reaching consensus; (ii) it is sufficiently decentralized so that no single entity can unilaterally change the protocol or governance. 2) "Investment Contract Assets," overseen by the SEC. This bucket covers tokens representing equity, debt or similar rights, including tokenized stocks, traditional securities issued on-chain, and RWA such as real estate, notes and accounts receivable. 3) Payment stablecoins, overseen by banking regulators, with requirements tied to capital, custody and anti-manipulation standards. Compared with FIT21—which passed the House but died in the Senate in 2024—the Clarity Act adds three notable upgrades: • Stablecoin oversight shifts from "left unspecified" to "allocated by platform": stablecoin trading on CFTC-regulated platforms falls under the CFTC, while trading on SEC-regulated platforms falls under the SEC, with the SEC retaining anti-fraud authority. • DeFi exemptions move from a principle-based safe harbor to a list of exempt activities. Three actions—operating a custodial front end, running a node, and releasing code—would not trigger registration. • Exchange registration moves from "interagency coordination" to a mandatory dual-registration requirement for intermediaries dealing in digital assets, even if they are already SEC-registered broker-dealers. The bill's central aim is to end the industry's biggest unresolved question of recent years: which agency regulates what. A narrow legislative track record Rep. French Hill's office has noted that more than 40 crypto- and blockchain-related bills were introduced in the 116th Congress (2019–2020), and none became law. FIT21 emerged in the 118th Congress (2023–2024), passed the House in May 2024 as the first market-structure bill to clear a full House vote, then stalled out in the Senate. On July 18, 2025, Trump signed the GENIUS Act, creating a federal framework for payment stablecoins—the first and still the only crypto-related federal bill to become law in six years. One day earlier, on July 17, the House passed the Clarity Act 294–134. The Clarity Act is now at the same formal stage FIT21 reached: House passage with the Senate next. The political backdrop is different. FIT21 faced a Democratic White House without top-level momentum for crypto legislation. The Trump administration is openly pushing now, but the ethics clause remains a sticking point and key Democrats have not moved. If the first week of August passes without action, the Senate is expected to adjourn until Sept. 14. With midterm elections on Nov. 3, whether the bill can be signed into law in 2026 no longer hinges solely on White House support. In a six-year stretch where more than 50 bills were introduced and only one became law, the next two months may determine whether the Clarity Act becomes the second.