Ethics Temp Ban: Lawmakers Pre-Set Clarity Act's Crypto Cliffhanger for 2029 🗓️

Senate Republicans released a 616-page working draft of the Digital Asset Market Clarity Act on July 22, 2026, formally incorporating an ethics provision that bars the president, vice president, members of Congress, federal judges, and their spouses from issuing or sponsoring digital assets — language set to "have no force and effect on and after noon on January 20, 2029." The temporary restriction requires covered officials to divest crypto holdings or place them in a blind trust, leaves enforcement to the U.S. Attorney General and the Department of Justice rather than state attorneys general, and does not extend to the children of public officials. President Donald Trump agreed to the broad restrictions last week; the White House has described the package as "the most comprehensive and wide-ranging ethics provision in history." Financial disclosures released last month showed Trump earned more than $1.2 billion from crypto businesses in the past year, while Senator Cynthia Lummis's office has cited $1.4 billion in 2025 crypto earnings as fueling the conflict-of-interest concerns.

Bipartisan negotiators met on Capitol Hill on July 21 to narrow remaining disagreements, with ethics described by industry journalist Eleanor Terrett as the "primary hurdle" and DeFi provisions still under discussion. A spokesperson for Senator 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." The deepest point of disagreement on enforcement, according to people familiar with a Tuesday White House briefing to industry insiders, pits Democratic preferences for state attorneys general against a Republican push to keep the U.S. attorney general as the top authority. The package also retains the Blockchain Regulatory Certainty Act, which clarifies that non-custodial software developers are not "money transmitters," and includes new language addressing law-enforcement concerns over illicit-finance safeguards covering developers.

Democrats have signaled the deal may not be enough. Senator Kirsten Gillibrand, chair of the Democratic Senatorial Campaign Committee, faced criticism in a letter sent by Indivisible and Demand Progress to every Democratic Senate office, which raised concerns over her crypto ties and her son's new crypto venture. Senator Angela Alsobrooks told Politico on Tuesday, "I wouldn't support the bill if that's the language," adding, "But we'll keep working from that floor to reach an agreement that holds us all accountable." Senator Ruben Gallego said Thursday of the ethics provisions, "Whatever piece of s--- they sent back to us, that was not a serious effort," and added that "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 bill needs 60 votes to clear the Senate, where Republicans hold 53 seats, meaning at least seven Democrats must sign on.

Majority Leader John Thune plans to bring the bill to the Senate floor next week regardless of whether it has enough support, with August 7 seen as a hard deadline before the chamber's summer recess. Senate Republicans hold a 52-47 majority over Democrats in some counts and 53 seats in others. The Crypto Council for Innovation, Digital Chamber and Blockchain Association urged Thune and Minority Leader Chuck Schumer in a Friday letter to prioritize "floor consideration" of the bill. 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," adding, "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 Wednesday, "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."

Lummis has separately pointed to Sections 201, 303 and 305 of the bill as countering illicit finance, telling X on July 26, "North Korea's Lazarus Group and other bad actors thrive on gaps in our financial rules. The Clarity Act gives Treasury new sanctions authority and a safe harbor for companies to freeze suspicious transactions before the money moves." Treasury estimates Lazarus has taken at least $3.4 billion in crypto since 2007, including a roughly $625 million Ronin Bridge theft in 2022 and a $1.5 billion Bybit hack in February 2025. Polymarket traders currently price 2026 passage at roughly 33% to 37%, down from above 80% in February, as a delayed vote pushes the bill closer to a midterm-election calendar.