Lummis Hands Dems a 2029 Sunset and a Lazarus-Shaped Talking Point 🌅

Senate Republicans released a 616-page draft of the Digital Asset Market Clarity (CLARITY) Act on Wednesday, formally inserting an ethics provision that bars the president, vice president, members of Congress, federal judges, and their spouses from issuing or sponsoring crypto assets while in office, with non-compliance enforced by the U.S. Attorney General. The restriction carries a sunset clause and "shall have no force and effect on and after noon on January 20, 2029," a date that aligns with the end of President Donald Trump's current term. The provision also requires covered officials to divest crypto holdings or place them in a blind trust, but does not extend to officials' children. The text was posted at Punchbowl News and circulated to crypto industry insiders before Democratic lawmakers had seen it. Senate Majority Leader John Thune's office told CoinDesk he intends to move to floor action in the coming days before the August recess, with August 7 viewed as a hard deadline.

The White House described the language as "the most comprehensive and wide-ranging ethics provision in history," and a White House spokeswoman said last week's White House meeting "went well," adding that "the ethics text set to release in the coming days will reflect that productive conversation." A spokesperson for Senator Cynthia Lummis echoed that framing, and Lummis, a Wyoming Republican leading negotiations, issued a statement thanking Democrats for their contributions and sharing "my commitment to reaching a deal in the coming days that will allow this legislation to become law." Democratic negotiators, however, remain unhappy with the enforcement design. Senator Angela Alsobrooks told Politico, "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." Senate Democrats have pushed for state attorneys general to share enforcement authority, while the White House and Republican negotiators have insisted on the U.S. Attorney General as the top enforcer.

Senator Kirsten Gillibrand, chair of the Democratic Senatorial Campaign Committee (DSCC), is facing fresh backlash from progressive groups including Indivisible and Demand Progress, which sent a letter to every Democratic Senate office raising concerns over Gillibrand's crypto ties and her son's new crypto venture. Senator Ruben Gallego was blunter on Thursday, telling 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 bill needs 60 votes to clear the Senate and is expected to require at least 10 Democrats; Republicans hold 52-47. As of Wednesday, Trump's former personal attorney and acting AG Todd Blanche was awaiting a Senate confirmation vote to head the Justice Department.

Financial disclosures released last month showed Trump earned more than $1.2 billion from crypto businesses last year, with separate reporting citing $1.4 billion in 2025 crypto income. His family's company, World Liberty Financial, and his meme coin ventures have drawn sustained criticism. The ethics language does not cover Trump's children Don Jr. and Eric Trump, both co-founders of World Liberty Financial, and two of his sons also launched a Bitcoin ($BTC) mining company, American Bitcoin. The draft preserves the Blockchain Regulatory Certainty Act, creating a safe harbor clarifying that non-custodial software developers are not "money transmitters," a provision the industry considers a red line following Trump-era DOJ prosecutions of developers building privacy tools. Senate Banking and Agriculture committees merged their texts, and the latest version adds dozens of pages of language on user and investor safeguards.

Lummis has also framed the bill as a national-security instrument, writing on X on July 26 that "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." She points to Section 201, extending Bank Secrecy Act and AML obligations to crypto firms, exchanges, DeFi front ends, and crypto ATMs; Section 303, adding Treasury crypto sanctions authority aimed at Iran; and Section 305, which allows exchanges to voluntarily freeze funds tied to suspicious activity, provided they cooperate with law enforcement. Treasury estimates Lazarus has taken at least $3.4 billion in crypto since 2007, including roughly $625 million from the Ronin Bridge in 2022 and $1.5 billion from Bybit in February 2025, the largest crypto heist on record. Senator Elizabeth Warren has called the bill a sanctions loophole, while 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."

The Crypto Council for Innovation, Digital Chamber, and Blockchain Association wrote to Thune and Minority Leader Chuck Schumer on Friday urging "floor consideration" of the bill, saying they "recognize that constructive bipartisan negotiations remain underway to secure and expand support for this critical piece of legislation." Digital Chamber CEO Cody Carbone added, "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." Thune has said he does not expect a final vote before the August recess, though he still wants floor debate to begin. Polymarket traders price 2026 passage at roughly 33% to 37%, down from above 80% in February, leaving the bill's path through the Senate, and whether the 2029 sunset proves a bridge or a barricade, unresolved.