Senate Republicans released an updated version of the CLARITY Act on July 22, aiming to create a federal market-structure framework for digital assets. The bill now includes ethics restrictions that bar the president, vice president, members of Congress, federal judges, and other covered officials from issuing or sponsoring cryptocurrencies for compensation while in office. Their spouses are also restricted.
What the bill does
Covered officials must sell or place any existing crypto holdings in blind trusts. Sales over $1,000 must be disclosed. The Government Accountability Office will study gaps in federal ethics rules for cryptocurrency and recommend changes. Enforcement authority goes to the Justice Department, with civil penalties. Exchanges that knowingly list prohibited tokens can also be targeted.
The bill also preserves protections for software developers under the Blockchain Regulatory Certainty Act — they won't be classified as money transmitters if they don't control user assets. Grayscale said the bill would unlock adoption.
The political path
The ethics restrictions respond to pressure from Senate Democrats, particularly Elizabeth Warren, who cited President Trump's crypto ventures as a conflict of interest. The Senate Banking Committee advanced the bill in a 15-9 vote in May without the ethics provisions, which were added later to secure broader support. Trump's acceptance of the Republican proposal removed a key uncertainty.
But Democrats have concerns about the Justice Department having primary enforcement without state attorneys general involvement. Senator Cynthia Lummis thanked Democratic colleagues and expressed commitment to reaching a deal.
The bill now heads to the full Senate floor. The unresolved question is whether Democrats will push for state-level enforcement authority alongside the Justice Department. The GAO study on ethics gaps is also expected to inform further changes. No timeline has been set for a floor vote.
