Updated Clarity Act Seeks to Ban Federal Officials From Crypto Profits
Senate Republicans update the Clarity Act with crypto ethics rules banning federal officials from profiting from digital assets.
Senate Republicans released an updated version of the Digital Asset Market Clarity Act on Tuesday. The revision adds a sweeping ethics package barring federal officials from profiting off digital assets while in office.
Senator Cynthia Lummis said this would be the moment when President Trump agreed to restrictions that go beyond what current law requires. She called on the Senate to pass the bill without delay.
The ethics terms were shaped through negotiations between the White House and Republican senators, without Democratic input so far.
Clarity Act Ethics Ban Targets Federal Officials
The new language bars the President, Vice President, members of Congress, federal judges, and their spouses from issuing or sponsoring digital assets for compensation.
The restriction covers every branch of government. Officials with existing crypto holdings must sell those assets or place them in a blind trust they cannot control.
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
Reporter Eleanor Terrett noted the rule carries a sunset date of January 20, 2029, making it temporary rather than a permanent fixture. The bill states it does not override existing conflict-of-interest, securities, or anti-fraud laws already on the books.
Enforcement Powers and Disclosure Rules Take Shape
The Department of Justice would gain civil enforcement authority over violations under the current draft. That includes the power to sue exchanges that knowingly list tokens tied to banned officials.
Penalties for exchanges could reach $250,000 per violation, per day. Officials who break the rule would face disgorgement of profits plus a civil fine equal to 10% of compensation received or $500,000.
Disclosure requirements would also tighten, forcing officials to report crypto sales over $1,000. Terrett reported that Democrats have pushed back on giving the DOJ sole enforcement authority, arguing state attorneys general should share that role.
Bipartisan talks over the enforcement section are expected in the coming days.
🚨NEW: Senate Republicans have just released an updated version of the Clarity Act following briefing calls with stakeholders this morning.
Here are some of the key provisions in the latest text, including ethics, the BRCA and other areas we’ve been following closely.
— Eleanor Terrett (@EleanorTerrett) July 22, 2026
Other Provisions Shape the Broader Bill
Beyond ethics, the bill keeps several sections unchanged from the version cleared by the Senate Banking Committee in May. The Blockchain Regulatory Certainty Act portion stays intact, protecting non-custodial developers from being classified as money transmitters.
The Lummis-Grassley amendment remains attached, preserving criminal liability for anyone who knowingly enables illicit transactions.
The Keep Your Coins Act section still protects individual self-custody rights. Stablecoin rules keep the Tillis-Alsobrooks compromise, blocking interest payments on idle balances while allowing activity-based rewards.
A new law enforcement section adds funding for state and local crypto investigations and blockchain analytics tools. It also creates a cyber center aimed at threats from North Korea and Iran, along with a public-private task force targeting crypto fraud.
Bankruptcy protections in the bill would keep customer assets separate from a failed exchange’s estate, a safeguard meant to prevent a repeat of the FTX collapse.
The Government Accountability Office would be required to review the ethics provisions within 360 days of enactment. The rules would take effect 360 days after enactment or 60 days after a final implementing rule, whichever comes first.
Lummis framed the agreement as proof that strict ethics standards and support for digital asset innovation can move forward together.
