US Senate Republicans Revamp CLARITY Act with Stricter Rules for Officials

The US Senate Republicans have released an updated version of the CLARITY Act, aiming to establish a federal market-structure framework for digital assets. The proposal addresses various disputes that have hindered its progress through Congress.

One of the key updates is the ban on officials, including presidents and lawmakers, from issuing or holding crypto tokens while in office. This move seeks to address concerns about conflict-of-interest issues. The legislation would also require covered officials to sell any affected holdings, place them in blind trusts, or use a combination of both approaches.

The proposal has generated support from some quarters, with Senator Cynthia Lummis stating that the bill proves consumer protection and pro-innovation policy are not mutually exclusive. Asset management firm Grayscale has also expressed optimism about the bill's potential to unlock further adoption in the industry.

However, Democrats have raised concerns about giving the Justice Department primary enforcement authority without providing a role for state attorneys general. Further negotiations over the ethics section are expected as Republicans seek Democratic votes to advance the broader CLARITY Act.