Congress Proposes Clarity Act Amendments to Restrict Official Crypto Activities, With 2029 Sunset

Senate Republicans introduced an updated Clarity Act draft targeting ethical oversight of digital assets, introducing restrictions on federal officials’ involvement in crypto projects.

The revised legislation includes a “Ban on certain digital asset transactions” prohibiting covered officials from issuing or sponsoring digital assets in exchange for consideration. This ban applies to current and former government employees, their spouses, and mandates compliance through blind trusts, divestiture, or procedural adherence to ethics guidelines.

Violations could lead to asset de-listing, while a safe harbor allows officials to avoid penalties by transferring holdings or establishing trusts as specified in section 208 of title 18.

The draft resolves a prolonged debate over President Trump’s crypto activities, particularly his ties to the $TRUMP token and World Liberty Financial, which generated $1.4 billion in reported income in 2025.

Bipartisan negotiations involved White House and Republican Senators Lummis and Moreno, but no Democratic support was secured. Prior attempts to implement crypto ethics rules in May 2025 failed during a markup session.

The Blockchain Regulatory Certainty Act (BRCA) remains unchanged, preserving protections for non-custodial developers and infrastructure providers from being classified as money transmitters.

Amendment Highlights

The Lummis-Grassley amendment maintains criminal penalties for facilitating illicit crypto transactions. The Keep Your Coins Act reinforces self-custody rights.

Stablecoin regulations incorporate a stall on interest on dormant balances, permitting activity-based rewards (e.g., staking) that do not mimic bank interest products.

Law enforcement provisions include funding for crypto investigations, blockchain analytics training, and a public-private task force targeting fraud.

Stablecoin issuers must comply with legal orders to freeze or modify tokens, and bankruptcy laws now classify customer digital assets as separate from corporate estates.

While Republicans drafted the 616-page bill, Democratic endorsement remains pending, with Majority Leader Thune scheduling a floor vote in the near future.

Advocacy from Coinbase and Treasury Secretary Bessent intensified pressure to finalize the act before the summer recess, underscoring its political urgency.