Senate negotiators have proposed revised ethics language for the CLARITY Act, allowing state authorities to enforce restrictions on federal officials' crypto activities. According to reports, Republican Sen. Thom Tillis and Democratic Sen. Ruben Gallego have submitted a counterproposal to the White House that changes how the ethics provisions in the Digital Asset Market Clarity (CLARITY) Act would be enforced.
Revised Enforcement Provisions
Instead of giving the U.S. Attorney General sole enforcement authority, the proposal would allow state authorities to enforce a ban on federal officials issuing or sponsoring digital tokens. This revision addresses one of the main concerns raised by Senate Democrats during negotiations over the crypto market structure bill.
The White House had previously accepted what it described as the most extensive federal ethics restrictions ever proposed after negotiations with Republican Sens. Cynthia Lummis and Bernie Moreno. However, the administration did not disclose the final wording or explain how the provisions would be enforced.
Ongoing Negotiations
Debate over ethics rules has continued for weeks despite earlier progress between the White House and Senate Republicans. Several Democrats argued that leaving enforcement solely to the Department of Justice would not provide enough independent oversight because the department falls under the executive branch.
Pressure has increased as lawmakers approach the Senate's August recess with limited time remaining to move the legislation. Treasury Secretary Scott Bessent called on senators earlier this week to hold a vote on the CLARITY Act before leaving Washington, arguing that lawmakers should publicly state where they stand on the crypto market structure bill.
