The CLARITY Act Ethics Text Is Finally Here, One Dispute From the Floor

TL;DR

• The merged 616-page CLARITY Act text now contains an outright ban for officials issuing or sponsoring crypto while in office
• For Democrats, DOJ-only enforcement is not going to work, since the Attorney General is appointed by the President
• For Republicans, anything other than this solution would open officials up to politically motivated lawsuits, a red line for both sides
• The bill needs at least seven Democrats and realistically has to pass before August 7th

The-616 page, merged Agriculture and Banking version of the CLARITY Act text has finally been released and presented to the Senate. The version now contains the ethics provision that has been the last major point of contention. In this version, there’s an outright ban for officials issuing or sponsoring crypto while in office. 

However, Democrat senator Alsobrooks stated even before the release that it was an “unserious offer”. Their stance is that, while the ban itself has just a few points to negotiate, the DOJ-only enforcement suggested is not going to work for them. There’s still hope for a floor vote before the Senate leaves for recess. It could happen as soon as next week.

What’s in the provision

In the new ethics provision, the president, vice president, members of Congress, federal judges, public officials and employees, and their spouses are banned from issuing or sponsoring digital assets for compensation while in office. Holding crypto as a passive investment remains legal. 

Breaking these rules would force violators to surrender all profits made and pay a fine of 10% of the proceeds or $500,000. The provision is set to end on January 20th, 2029, the same day Donald Trump leaves office. 

The reason this has been such a big deal for the Democrats is the $1.4 billion crypto related income the President had in 2025. The White House has approved the language in the ethics provisions. 

The fight is over the enforcer, not the ban

So, the ethics provisions are now in the bill, but there are still issues with it, namely who enforces it. Democrats are worried about a DOJ-only, civil action solution. Their stance is that the Attorney General is appointed by the President and is therefore biased. 

For the Republicans, anything other than this solution would open officials up to politically motivated lawsuits by state prosecutors. Senator Lummis, on of the Republicans lead negotiators on the bill, said in an interview with CoinDesk:

That was a bright red line for a lot of U.S. senators who did not want to subject themselves to being sued by a different state attorney general.

She also notes that the enforcement section of the provision is likely to be discussed further throughout the weekend.

What’s next

Passing the bill needs 60 votes in the Senate, meaning it needs at least seven Democrats to clear the Senate’s filibuster threshold. No Democrat is currently on record as supporting the bill, even with the new ethics provision. 

And there’s timing pressure. Realistically, the bill needs to hit the floor and pass before August 7th. After that, the midterm campaigning becomes the main activity for Senators.

The ethics provision was supposed to be the final piece that unlocked the bill. With it presented, there’s now a new standoff - the enforcement of that provision with both sides calling it a red line. The market structure bill itself has broad support but is now stuck on a dispute that has nothing to do with market structure.