Crypto Bill Hits Ethics Wall: DOJ-Only Enforcement Leaves Democrats Unimpressed 🏛️

A revised 616-page crypto market structure bill circulated by Senate Republicans on July 22 includes a White House-backed ethics provision, but no Democrat has publicly endorsed the latest text. Senate Majority Leader John Thune said he wants to move the bill to the Senate floor before the August recess, though it remains unclear whether Republicans can secure the 60 votes needed to advance the legislation.

The ethics provision bars the president, vice president, members of Congress, senior executive branch officials, and their spouses from issuing or sponsoring certain digital assets while in office. It designates the U.S. attorney general as the primary enforcement authority and does not authorize state attorneys general to enforce the ethics rules. The restrictions would expire in 2029 unless extended by Congress.

Republicans hold 53 Senate seats, meaning they would likely need support from at least seven Democrats if all senators vote. The ethics language was negotiated between Senate Republicans and the White House and reflects a compromise the Trump administration was willing to support. Under the proposal, crypto platforms could be required to avoid listing digital assets issued or sponsored in violation of the ethics rules, while the attorney general could pursue civil enforcement against officials and parties that knowingly violate the provision.

For many Democrats, the enforcement structure remains unacceptable, with party members preferring broader oversight that includes state-level authorities alongside federal enforcement. The bill's sponsors have continued discussions with Democratic offices, though the July 22 draft contained no language changes addressing those concerns. The legislation's broader market structure provisions, which would define regulatory jurisdiction over digital assets between the Securities and Exchange Commission and the Commodity Futures Trading Commission, remain substantively similar to earlier versions filed in 2025.

The CLARITY Act, identified in coverage on July 28, was shelved as the broader legislative package stalled, contributing to a decline in $BTC and $ETH during the Asian trading session. Lawmakers have not announced a revised timeline for floor action, and Thune's office declined to comment on whether the bill would be brought up before the recess deadline.