Ethics Clause Lands in CLARITY Draft — Clock Starts Ticking at Noon, January 20, 2029 🕒

Bipartisan negotiators on Capitol Hill met on Monday to narrow the remaining dispute over the Digital Asset Market Clarity (CLARITY) Act, with conflict-of-interest restrictions for federal officials emerging as the central sticking point, according to crypto journalist Eleanor Terrett, who wrote on X that "Bipartisan discussions are taking place on Capitol Hill today relating to ethics, I'm told. Negotiators are also discussing DeFi provisions, but ethics remains the primary hurdle." A spokesperson for Senator Cynthia Lummis said last week's White House meeting "went well" and that "the ethics text set to release in the coming days will reflect that productive conversation."

Senate Republicans on Wednesday released a 616-page draft of the CLARITY Act containing an ethics provision that bars the president, vice president, members of Congress, federal judges, and their spouses from issuing or sponsoring digital assets while in office. The text, posted at Punchbowl News, requires covered officials to divest their crypto holdings or place them in a blind trust, and gives the U.S. Attorney General — rather than state attorneys general preferred by Democrats — primary enforcement authority. A White House official told industry insiders on Tuesday that President Donald Trump had agreed to "the most comprehensive and wide-ranging ethics provision in history." Enforcement language drew a sharp Democratic reaction: "I wouldn't support the bill if that's the language," Senator Angela Alsobrooks said Tuesday in a statement to Politico. "But we'll keep working from that floor to reach an agreement that holds us all accountable."

The provision carries a sunset clause stating it will have "no force and effect on and after noon on January 20, 2029" — the end of Trump's current presidential term — and does not extend to the children of public officials. Trump reported earning more than $1.2 billion from crypto businesses last year, with one report citing $1.4 billion in 2025, according to financial disclosures Democrats have pointed to as evidence of conflicts of interest. Trump's sons, including co-founders of World Liberty Financial and the Bitcoin ($BTC) mining firm American Bitcoin, are not covered by the temporary ban. Senator Elizabeth Warren has demanded the bill bar the president, vice president, senior officials, members of Congress, and their families from profiting off the sector.

Senator Kirsten Gillibrand, chair of the Democratic Senatorial Campaign Committee, is facing criticism from progressive groups Indivisible and Demand Progress, which sent a letter to every Democratic Senate office raising concerns over her crypto ties and her son's new crypto venture as she helps negotiate the ethics compromise, Axios reported. The bill needs 60 votes to clear the Senate, requiring support from at least 10 Democrats, many of whom have already said they will not vote for any bill without stronger ethics language addressing what some lawmakers have called the president's "crypto corruption." Senate Majority Leader John Thune's office told CoinDesk on Wednesday he intends to move forward with floor action in the coming days before the chamber's August 7 summer recess, regardless of whether enough Democrats sign on. "This bill applies one ethics standard to everyone, including the President of the United States, and backs it up with real enforcement, real penalties, and a Department of Justice mandate to act," Lummis said on behalf of the U.S. Senate Banking Committee's subcommittee on digital assets. "This is not talk."

The draft also preserves the Blockchain Regulatory Certainty Act, a safe harbor clarifying that non-custodial software developers are not "money transmitters" subject to related compliance obligations — a provision the crypto industry has called a red line following Trump-era DOJ prosecutions of developers. Digital Chamber CEO Cody Carbone said in a statement, "Today's draft is a meaningful step toward the Senate vote on the Clarity Act we've been calling for. We're encouraged, and we're ready to keep working until the bill reaches the president's desk."