New Clarity Act Draft Seeks to Ban Officials From Issuing Crypto

Senate Republicans released an updated version of the Clarity Act this week, introducing strict ethics rules for government officials. The new draft bars the president, vice president, members of Congress, and federal judges from issuing or sponsoring digital assets while in office. These individuals would be required to divest their current crypto holdings or place them into a qualified blind trust to avoid potential conflicts of interest.

The proposal includes a sunset clause, meaning these specific ethics restrictions would expire on January 20, 2029. This date aligns with the end of the current presidential term. While the bill mandates these changes, it also provides protections for officials whose name or image was used by crypto projects before they took office.

Beyond ethics, the legislation maintains core industry protections like the right to self custody and clear rules stating that non custodial developers are not money transmitters. The draft also introduces measures to help law enforcement combat fraud and includes bankruptcy protections designed to keep customer assets separate from a failed company's estate.

This updated text is currently a Republican led effort and lacks official support from Senate Democrats. Senator Cynthia Lummis expressed hope for a bipartisan agreement in the coming days, as leadership eyes a floor vote in the near future. Investors should watch for further negotiations, as the bill remains a key piece of legislation for the future of crypto regulation in the United States.