Points of Focus

• Senate updates CLARITY Act with a crypto ethics ban for federal officials.
• DOJ gains sole authority to enforce the proposal.
• Senate leaders target a floor vote before the August recess.

The US Senate’s latest draft of the Digital Asset Market CLARITY Act adds a new ethics provision that would prohibit the president and other senior federal officials from issuing or sponsoring digital assets for financial gain while in office. 

The addition marks one of the biggest changes to the bill as Senate Republicans race to secure enough bipartisan support before the August recess.

History will remember this as the moment a president chose a higher standard of ethics than the law required of him. This agreement bans ALL federal officials — including the President — from issuing or sponsoring a digital asset for profit, with real enforcement and real… pic.twitter.com/zYlD0nRGjB

— Senator Cynthia Lummis (@SenLummis) July 22, 2026

CLARITY Act ethics rules target crypto conflicts

Senator Cynthia Lummis released the updated legislative text on Wednesday, describing it as the product of work by the Senate Banking and Agriculture Committees after months of negotiations. The proposal would apply to covered federal officials, including the president, vice president, members of Congress, federal judges, executive branch officials and, in many cases, their spouses.

The draft would also prevent digital assets issued in violation of the rule from being listed by digital asset intermediaries. Officials who already own digital assets before taking office could comply by placing those holdings into a qualified blind trust, divesting them, or using both options under existing federal ethics rules.

DOJ enforcement faces Democratic scrutiny

The updated draft gives the US Department of Justice exclusive authority to enforce the ethics provision. 

According to the bill text circulating in the Senate, courts could impose civil penalties of up to $250,000 for each day a violation continues. The ethics section would expire on Jan 20, 2029, unless Congress extends it.

That enforcement model remains one of the bill’s biggest hurdles. Senator Angela Alsobrooks (D-Md.) criticized the proposal’s enforcement framework, saying state attorneys general should serve as a backstop instead of leaving enforcement solely to the Department of Justice. Democratic support remains important because the legislation will likely need 60 votes to advance in the Senate.

Market structure push enters final stage

The updated draft comes as Senate Republicans race to pass the CLARITY Act before the Senate’s Aug. 10 August recess. 

Galaxy Research has warned that missing the deadline could significantly reduce the bill’s chances because of the compressed legislative calendar ahead of the midterm elections. 

Prediction market Polymarket also reflects the uncertainty, with traders assigning just a 43% chance (a jump from 39%) that the CLARITY Act will be signed into law in 2026.