President Trump’s $1.4-billion crypto windfall has become the biggest obstacle to passing his sweeping digital-asset legislation as Democrats demand tougher language to prevent the president from profiting off an industry his administration regulates.

Senate Republicans released a proposal this week intended to break a months-long impasse over the bill, known as the Clarity Act. But Democrats and consumer watchdog groups dismissed the terms almost immediately, complaining the bill would not stop Trump or his family from continuing to profit from his meme coin and other crypto ventures.

Trump needs the support of at least seven Senate Democrats to pass the legislation, which would set rules for digital assets. Ethics has emerged as the…