White House Backs New Crypto Ethics Rules for CLARITY Act

Senate Republicans released a massive 635 page revision of the CLARITY Act this week. This move comes as a final attempt to gain bipartisan support ahead of a critical procedural vote scheduled for September 15. The legislation aims to create a clear regulatory framework for digital commodities by defining the roles of the CFTC and the SEC.

The most notable change is a new ethics framework backed by President Donald Trump. This section mandates that public officials with significant crypto holdings must sell them or move them into a blind trust. These rules are designed to address specific concerns raised by Democrats regarding potential conflicts of interest. The Department of Justice and state attorneys general will oversee enforcement of these measures.

Beyond ethics, the bill introduces a circuit breaker for stablecoins to protect community banks during periods of high withdrawal activity. It also enforces stricter rules on vertical integration for exchanges to prevent unfair trading practices. While the bill clarifies compliance requirements for miners and validators, it does not override existing derivatives regulations or prediction market rules.

Senator Cynthia Lummis stated that the bill is ready for a vote after a year of intense negotiations. Industry leaders, including Brian Armstrong of Coinbase, have publicly supported the updated version, noting that it addresses previous industry concerns. Investors and lawmakers are now watching to see if these concessions are enough to move the legislation forward in the Senate.