New Draft Declaratory Rule Will Prevent Trump And Officials From Exempting Crypto, By 2029 Sunset
Senate Republicans released an updated version of the Clarity Act on Wednesday, the first draft containing a crypto ethics agreement that prohibits the president, vice president, members of Congress, federal judges, and other covered officials from issuing or sponsoring digital assets.
The new text of the Clarity Act, submitted after morning conference calls with stakeholders, adds a section titled “Prohibit the sale of certain digital assets.” It says the covered person “shall not, upon consideration,” issue or sponsor digital assets, a ban that applies to government officials and employees during their service, as well as their spouses.
A companion clause prohibits the listing of any digital property found to be issued or sponsored by a covered person in violation of the ban.
The bill provides a safe harbor. A covered person can avoid violation by placing a direct interest in the digital asset in a qualified blind trust, disposing of it, or both, through procedures that follow the rules of the ethics agreement under section 208 of title 18.
A unique carve-out protects continued use of a person’s name, image, or likeness when the issuer or intermediary uses it before the person enters the covered state.
The ethics package has an expiration date. Under the draft, the provisions have no effect after the afternoon of January 20, 2029, and no person will face punishment after that sunset for conduct on or before it. The time coincides with the end of the current president’s term.
The Clarity Act contradicts President Trump’s crypto efforts
The ethics language responds to the Clarity Act’s months-long controversy over President Trump’s crypto business, whose July financial disclosure pegged it at $1.4 billion in 2025 revenue from the $TRUMP token and World Liberty Financial.
Eleanor Terrett reported that the package was being negotiated between the White House and Republican Senators Cynthia Lummis and Bernie Moreno, and that it did not exclude the signature of the Democratic Alliance.
Democrats on the Banking Committee had pushed for more stringent conflict-of-interest rules, and the bar’s amendment to crypto bonds failed during the May markup of the Clarification Act.
Ethics aside, industry sources say the Blockchain Regulatory Certainty Act remains intact in the committee version. The BRCA concluded that developers and infrastructure providers are not funders of building or maintaining decentralized networks, a protection the industry has pushed to maintain.
Some details of the amendment
The Lummis-Grassley Amendment maintains criminal liability for anyone who “knowingly” facilitates an illegal transaction, and the Keep Your Coins Act preserves the right to self-restraint.
The stablecoin-yield category captures the Tillis-Alsobrooks compromise: the prohibition of interest paid on passive payment-stablecoin balances, with a place for rewards associated with activity such as trading or staking, as long as those rewards do not act as interest on bank deposits.
The new Clear Law section creates enforcement tools. It is increasing funding for regional and local crypto investigations and blockchain analysis, setting up police and prosecutor training, creating a “cyber center” against state actors like North Korea and Iran, and creating a public and private task force on fraud.
It also requires stablecoin issuers to comply with legal orders to freeze, confiscate, burn, and reissue tokens.
The document contains bankruptcy protections that treat a customer’s digital assets as the customer’s assets rather than part of the failed company’s assets, a rule intended to eliminate some FTX-style losses.
The 616-page draft comes from Republicans, and has no Democratic support yet.
Senator Lummis thanked his “Democratic colleagues for their valuable contributions” and expressed his commitment to “reach an agreement in the coming days that will allow this legislation to become law.” Majority Leader John Thune is planning a low vote in the coming weeks.
The release goes through additional pressure to pass the Clarity Act. The House passed its version in July 2025 by a vote of 294-134, and the measure has been pending in the Senate since then.
The Senate Banking Committee advanced its text by a 15-9 vote in May. Coinbase and other companies have been forced to pass before the August recess, Treasury Secretary Scott Bessent has put the effort on the “1-yard line,” and Trump has pressured the chamber to take action.
