Key takeaways
- Seven Democratic senators said the latest CLARITY bill requires stronger ethics and consumer protections.
- The revised bill would prohibit federal officials from issuing or sponsoring digital assets for compensation.
- Republicans defended the proposal, while White House adviser Patrick Witt disputed Democrats’ criticism.
Democrats say project still falls short
A bipartisan agreement on crypto market structure remained out of range on July 22 after seven Democratic senators opposed the latest version of the Digital Asset Market Clarity Act.
Senators Catherine Cortez Masto (D-NV), Angela Alsobrooks (D-MD), Cory Booker (D-NJ), Ruben Gallego (D-AZ), John Hickenlooper (D-CO), Mark Warner (D-VA) and Raphael Warnock (D-GA) said the proposal requires stronger protections. The senators said:
“The Republican proposed text for the CLARITY Act, as it currently stands, is insufficient. Key provisions, including those dealing with elected officials’ ethics, consumer protections, illicit finance, conflicts of interest and market integrity, must be strengthened.”
“We have been working in good faith with our Republican colleagues for a year and will continue to do so to get across the finish line,” they added.
Senator Lummis unveils revised framework
On July 22, Sen. Cynthia Lummis (R-WY) and Senate Republicans published updated legislation for the Digital Assets Market Clarity Act after the Senate Banking and Agriculture committees merged their respective parts of the proposal.
The proposal would establish a federal regulatory framework for digital assets and clarify oversight between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). The Senate Banking Committee approved the bill in May by a bipartisan vote of 15-9.
Ethical provisions become a hot spot
The revised bill would prohibit the president, vice president, members of Congress, federal judges and other federal officials, as well as their spouses, from issuing or sponsoring digital assets for compensation.
Violators could be required to forfeit their profits and pay civil penalties, while digital asset intermediaries who knowingly list banned tokens could face fines of up to $250,000 per violation per day.
A CLARITY Act Ethics Summary released by the Senate Banking Subcommittee on Digital Assets defended the provision, stating:
“This bill applies a single ethical standard to everyone, including the President of the United States, and backs it up with real enforcement, real sanctions, and a mandate for action from the Department of Justice. »
“This is not a speech. This is a president writing enforceable ethics rules into law and signing them himself. Digital asset innovation and clean government can go hand in hand, and the Digital Asset Market Clarity Act proves it,” the summary notes.
According to the summary, principals with pre-existing interests in previously issued digital assets would be required to divest those holdings or place them in a qualified blind trust. It would also require disclosure of digital assets sold for a fee and valued at more than $1,000.
Patrick Witt rejects democratic criticism
White House Crypto Advisor Patrick Witt said Democratic critics seem to focus on two issues: the lack of enforcement by state attorneys general and the absence of sanctions for Previous crypto activity of President Donald Trump.
Witt argued that allowing only federal enforcement is consistent with existing ethics laws. He also said imposing sanctions for past conduct would violate Article I, Section 9 of the U.S. Constitution, which prohibits Congress from passing ex post facto laws that retroactively criminalize conduct that was lawful at the time it occurred.
Negotiators should continue discussions on ethics, consumer protectionAnd illicit financing as they work on a final version of the legislation.
