Senate's Clarity Act ethics rule sunsets in 2029 — conveniently after Trump's term

Bipartisan negotiations on the Digital Asset Market CLARITY Act continued on Capitol Hill on Tuesday, with ethics provisions emerging as the single biggest hurdle to a Senate floor vote. Crypto journalist Eleanor Terrett reported on X that "Bipartisan discussions are taking place on Capitol Hill today relating to ethics" and noted that "Negotiators are also discussing DeFi provisions, but ethics remains the primary hurdle." A spokesperson for Senator Cynthia Lummis said the ethics text set to release "in the coming days will reflect that productive conversation" from the prior week's White House meeting.

The 616-page draft released Wednesday by Senate Republicans includes an ethics provision banning covered officials — defined as the president, vice president, members of Congress, federal judges and their spouses — from issuing or sponsoring a digital asset. Crypto platforms would be barred from listing assets issued or sponsored by federal officials. Covered officials would be required to divest their crypto holdings or place them in a blind trust, or both. The provision carries a sunset clause stating it will have "no force and effect on and after noon on January 20, 2029," the final day of President Donald Trump's current term, and places enforcement under the U.S. Attorney General. Trump's former personal attorney and acting AG Todd Blanche was awaiting a Senate confirmation vote to head the Justice Department as of Wednesday. Senator Angela Alsobrooks told Politico, "I wouldn't support the bill if that's the language. But we'll keep working from that floor to reach an agreement that holds us all accountable."

Financial disclosures released last month showed Trump earned more than $1.2 billion from crypto businesses last year, with one source citing $1.4 billion in 2025 from his crypto ventures. Trump has been a major focus of the ethics debate alongside the Democratic senator Kirsten Gillibrand, who is facing criticism from progressive groups Indivisible and Demand Progress over her role in negotiating the ethics rules and her son's crypto venture. The ethics language does not extend to the children of public officials, including Trump sons Don Jr. and Eric, both co-founders of World Liberty Financial, with Donald Trump Jr. and Eric Trump also launching a Bitcoin ($BTC) mining company, American Bitcoin. 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.

Senate Majority Leader John Thune plans to move the bill to the floor as soon as the beginning of next week, before the August 7 deadline before the chamber's summer recess. The bill requires 60 votes to clear the Senate, where Republicans hold a 52-47 majority, meaning at least 10 Democrats must support it. Many Democrats have balked at the current enforcement structure, with State attorneys general remaining their preferred authority. Senator Ruben Gallego told Politico, "Whatever piece of s--- they sent back to us, that was not a serious effort," adding, "After all the work that we've done with our Republican colleagues, that they would take the months and months of work and somehow interpret that and turn around and think what they offered was even remotely close."

The latest draft also preserves the Blockchain Regulatory Certainty Act, which creates a safe harbor for non-custodial software developers by clarifying they are not "money transmitters" subject to associated compliance obligations. The provision follows Trump-era DOJ prosecutions that sent crypto developers to prison for building privacy tools. Senator Lummis said in a statement, "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. This is not talk." Digital Chamber CEO Cody Carbone said, "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." Coinbase CEO Brian Armstrong wrote on X, "There's no federal framework, so bad actors like FTX can harm US customers and much of the industry has gone offshore totally outside US purview. This bill fixes that with strong consumer protections, real tools for law enforcement, and a path for America to lead in this industry."