The CLARITY Act has received another round of changes as Senate Republicans try to secure enough Democratic support for Tuesday’s procedural vote on the cryptocurrency market structure bill.
The latest version, which consists of 635 pages, includes an ethics framework backed by President Donald Trump that would restrict public officials from issuing or sponsoring digital assets. The revised text allows both the Department of Justice (DOJ) and the state attorneys general authority to enforce the rules.
Last-Minute Revisions
The change addresses one of the main issues Democrats had raised during negotiations. They had previously objected to an arrangement in which the DOJ would be responsible for enforcing the ethics provisions. The debate over the rules also came from concerns surrounding Trump and his family’s financial involvement in the crypto sector.
US Senate Banking Digital Assets Subcommittee Chair Cynthia Lummis stated,
“After a year of intense daily bipartisan negotiations, this bill is ready. President Trump voluntarily agreed to unprecedented ethics restrictions, holding every federally elected official, judge, and their spouses to some of the toughest ethics restrictions in US history… Democrats got what they wanted; now they need to take yes for an answer.”
The ethics section incorporates much of the Tillis-Gallego proposal. Among its provisions, officials would have to either sell substantial crypto-related financial holdings or move them into a blind trust.
Changes to the Blockchain Regulatory Certainty Act (BRCA) now limit its scope to the Bank Secrecy Act and civil enforcement. Language that would have extended its protections to criminal proceedings, including cases brought under Section 1960, has been taken out. The changes would also bring miners and validators under those protections.
Other Key Details
The bill’s stablecoin yield section has also been revised with a “circuit breaker” mechanism first floated by Tillis in July. It would give federal regulators the ability to step in if stablecoins were causing significant withdrawals from community banks.
Stricter limits on vertical integration have also been introduced, such as rules covering affiliate trading and potential conflicts involving digital commodity exchanges, brokers, and dealers. The text also confirms that state consumer protection laws remain in effect. Developer protections would not override derivatives regulations or change the rules governing prediction markets.
Last week, Coinbase CEO Brian Armstrong voiced support for the CLARITY Act ahead of the Senate vote. Speaking on CNBC’s Squawk Box Asia on September 10, the exec said the bill was ready for approval and claimed support from law enforcement groups, banks, and crypto companies. He also said Coinbase’s main concerns with the legislation had been addressed after the company previously raised several issues it considered essential.
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