CLARITY Act Gets Crypto Ethics Overhaul Amid Regulatory Disputes
Senate Republicans have released an updated version of the CLARITY Act, which includes new crypto ethics restrictions targeting public officials and their spouses. The revised legislation comes after negotiations between the White House and Republican senators Cynthia Lummis and Bernie Moreno. However, the new provisions were not supported by Senate Democrats, creating another potential hurdle as lawmakers work to advance the broader crypto market structure bill.
The updated bill contains a dedicated ethics division focused on digital assets. It would impose new restrictions on certain digital asset transactions involving covered individuals, including public officials and employees, as well as their spouses. Covered individuals would be prohibited from issuing or sponsoring a digital asset for compensation while serving in office.
The bill also requires that a digital asset found to have been issued or sponsored in violation of the restrictions should not be listed for trading on a digital asset intermediary. Covered officials would also be required to sell their crypto holdings and investments in crypto companies or place those assets in a blind trust that they do not control.
However, the ethics provisions would not prevent public officials from discussing digital asset policy or taking official government action on crypto legislation and regulation as part of their duties. It also would not prohibit officials from holding digital assets as investments, subject to existing financial disclosure and conflict-of-interest rules.