On Wednesday, Senate Republicans introduced a revised version of the Clarity Act, which now includes a crypto ethics agreement. This agreement prohibits the President, Vice President, members of Congress, federal judges, and other designated officials from issuing or endorsing digital assets.

The latest draft, made available following morning stakeholder briefing calls, introduces a new section titled “Ban on Certain Digital Asset Transactions.” This stipulates that a covered individual “shall not, in exchange for consideration,” issue or endorse a digital asset, applying this prohibition to public officials, employees, and their spouses while they are in service.

Furthermore, a corresponding clause prevents the listing of any digital asset that has been issued or endorsed by a covered individual in violation of this ban.

The bill includes a provision offering a safe harbor. Covered individuals can avoid violations by placing direct interests in a digital asset into a qualified blind trust, divesting those interests, or both, in adherence to ethics-agreement protocols under Section 208 of Title 18.

Additionally, a specific exemption allows continued use of a covered individual’s name, image, or likeness if it was utilized by an issuer or intermediary prior to that individual entering covered status.

The ethical provisions are set to expire, as indicated by the draft, after noon on January 20, 2029. No individual will be subject to penalties for conduct occurring prior to this sunset date, coinciding with the conclusion of the current presidential term.

Controversy Surrounding President Trump’s Cryptocurrency Initiatives

The inclusion of ethics language addresses an ongoing dispute regarding President Trump’s cryptocurrency initiatives, which were linked to approximately $1.4 billion in income in 2025 through the $TRUMP token and World Liberty Financial according to a July financial disclosure.

Eleanor Terrett reported that the package was negotiated between the White House and Republican Senators Cynthia Lummis and Bernie Moreno, but it currently lacks Democratic support.

Democrats on the Banking Committee had advocated for enforceable conflict-of-interest regulations, with a proposed amendment to prohibit officials from any cryptocurrency affiliations failing during the May markup of the Clarity Act.

Beyond ethical considerations, industry sources indicate that the Blockchain Regulatory Certainty Act (BRCA) remains unchanged from the committee edition. The BRCA asserts that non-custodial developers and infrastructure providers should not be classified as money transmitters for the purpose of developing or maintaining decentralized networks—a crucial legislative safeguard advocated by the industry.

Details of Additional Amendments

The Lummis-Grassley amendment retains criminal liability for any party who “knowingly” facilitates illicit transactions, while the Keep Your Coins Act affirms the right to self-custody of digital assets.

The stablecoin yield section reflects a compromise between Senators Tillis and Alsobrooks, banning interest on idle payment-stablecoin balances but permitting rewards linked to activities such as transactions or staking, provided these rewards do not equate to interest on bank deposits.

A newly included section of the Clarity Act enhances law enforcement capabilities. It allocates funding for state and local investigations into cryptocurrencies and blockchain technologies, establishes training programs for law enforcement personnel, creates a cyber center to address threats from nation-state actors like North Korea and Iran, and establishes a public-private task force focused on fraud prevention.

Additionally, it mandates that stablecoin issuers comply with lawful requests to freeze, seize, burn, or reissue tokens.

The legislation also provides bankruptcy protections that classify customer digital assets as belonging to the customer, preventing them from being considered part of the estate of a failed enterprise—an effort to avert a recurrence of losses similar to those experienced during the FTX collapse.

The comprehensive 616-page draft, currently lacking Democratic backing, was formulated by Republican senators.

Senator Lummis acknowledged the contributions of her “Democratic colleagues” and expressed an eagerness to “reach a deal in the coming days” to propel this legislation toward enactment. Majority Leader John Thune has indicated plans for a Senate floor vote in the near future.

The release of this draft follows prolonged pressure to advance the Clarity Act. The House had passed its version in July 2025 with a vote of 294-134, and the bill has awaited consideration in the Senate since then.

The Senate Banking Committee advanced its text with a vote of 15-9 in May. Companies such as Coinbase have advocated for the bill’s passage before the August recess, while Treasury Secretary Scott Bessent noted that the effort is on the “1-yard line,” with Trump also urging expedited action from the chamber.

Source link

Bits n Coins

Thank you for visiting our site. You can get the latest Information and Editorials on our site regarding bitcoins.