Clarity Act Draft Merges Committees, Eyes Trump Crypto Ethics

Senators released a new draft of the Digital Asset Market Clarity Act on Wednesday, merging versions advanced by the Senate Banking and Agriculture Committees. The text adds an ethics provision that would bar senior government officials from sponsoring or issuing their own cryptocurrencies, a direct response to President Donald Trump’s $1.4 billion in crypto-linked earnings last year.

The window for passage is tight. The Senate is scheduled to leave for August recess on Aug. 7, leaving roughly three weeks for the bill to clear the chamber. The new draft is a step forward, but the ethics language remains the main sticking point.

The Ethics Fight

The provision, agreed to by the White House but not by Senate Democrats, gives Trump a year to divest or place his crypto businesses into a blind trust. The Department of Justice would enforce the rule. Democrats object on several grounds: they do not trust the DOJ to pursue a sitting president, the provision sunsets at the next inauguration, and Trump could continue benefiting from existing tokens bearing his name. A name-image-likeness clause also drew criticism.

Senator Cynthia Lummis, a Republican and a proponent of the bill, argued the provision applies to a broad set of government officials and federal judges. White House adviser Patrick Witt said it is the most sweeping ethics pledge any U.S. president has ever agreed to. Both points are accurate, but the political math is complicated.

Midterm elections are 15 months away. Control of the House and Senate will be decided. A headline figure of $1.4 billion gives Democrats a ready campaign issue. Senator Elizabeth Warren, the ranking Democrat on the Banking Committee, said the bill “should be dead on arrival,” citing investor protection and national security concerns.

The Legislative Clock