Democrats Block Latest Draft of CLARITY Act Over Ethics Concerns

A group of Senate Democrats has expressed concerns over the latest draft of the CLARITY Act, citing ethics and illicit finance issues. The bill, which aims to provide regulatory clarity for the crypto industry, has already seen some bipartisan support in the House and the Senate Banking Committee.

The updated draft includes an ethics package negotiated between the White House and Republican Senators Cynthia Lummis and Bernie Moreno. This package would bar certain officials from issuing or sponsoring digital assets while in office and require them to divest crypto holdings or place them in qualified blind trusts.

However, Democratic lawmakers have pushed back, arguing that the language on ethics and several important sections is still not strong enough. They claim that key provisions addressing consumer protection, illicit finance, conflicts of interest, and market integrity must be strengthened.

Senator Angela Alsobrooks called the proposal to place enforcement solely with the DOJ 'wild and unserious and stone-cold crazy,' arguing that state attorneys general should have enforcement powers. Securities lawyer Amanda Fischer also expressed concerns, stating that the draft 'doesn't change much at all about Trump's existing crypto grift' since it doesn't force any immediate divestment.