Key facts
- The CLARITY Act draft includes an ethics provision banning federal officials from issuing or sponsoring digital assets until January 20, 2029.
- President Donald Trump's crypto ventures would be subject to this ban.
- The Justice Department is designated to enforce the ethics provision.
- Democrats have raised concerns about the enforcement mechanism and require strong ethics language for support.
- The bill aims to establish a comprehensive regulatory framework for digital assets.
- It includes provisions for stablecoin rewards, AML compliance for exchanges, and fundraising exemptions.
Senate Republicans have unveiled the draft text of the Digital Asset Market Clarity (CLARITY) Act, a comprehensive bill aimed at establishing a regulatory framework for digital assets. A significant ethics provision within the 616-page text proposes to bar all U.S. federal officials, including President Donald Trump, from issuing or sponsoring any digital asset or crypto platform until January 20, 2029. This temporary ban, intended to prevent officials from profiting from personal crypto ventures, is a crucial element for potential Democratic support. Senator Cynthia Lummis, a key advocate, stated the provision applies one ethics standard to everyone, backed by enforcement and penalties mandated to the Justice Department. However, some Democrats, like Senator Angela Alsobrooks, have expressed reservations about the Justice Department's role in enforcement, suggesting alternative mechanisms might be necessary. The bill also includes provisions for stablecoin rewards, anti-money-laundering compliance for exchanges, fundraising exemptions for crypto companies, and definitions for decentralized finance platforms and tokenized securities. Senate Majority Leader John Thune reportedly plans to bring the CLARITY Act to a floor vote soon, but it requires bipartisan support to pass. The White House has described the ethics language as the "most comprehensive and wide-ranging ethics provision in history."