A revised version of the CLARITY Act introduced new ethics rules that would ban presidents, vice presidents and other senior public officials, along with their spouses, from issuing or sponsoring digital assets for compensation while in office.
The proposal is part of a broader rewrite of the legislation that also expands the Commodity Futures Trading Commission’s (CFTC) oversight of digital commodity markets.
However, at a time when crypto startups linked to public officials are increasingly scrutinized, ethics provisions are among the most notable additions.
New ethics rules target officially backed digital assets
revised draft law It creates a new ethical framework covering “public officials or employees” and their spouses.
Rather than creating a new definition, it adopts the existing federal definition of ethics, which includes: President and Vice President, among other senior government officials.
Under the proposal, covered individuals would be prohibited from issuing or sponsoring digital assets for compensation during their tenure.
The bill defines “issuance” to include controlling the creation, issuance, launch, or initial sale or distribution of a digital asset. It also defines “sponsor” broadly to include agreements to fund, organize, or publicly endorse a token.
This includes allowing use in connection with the creation or promotion of a person’s name, likeness, or official status.
If a digital asset is found to have been issued or sponsored in violation of these provisions, it may not be listed for trading on a digital asset broker under the offering.
The restrictions will apply only during the official’s term of office and will also extend to the official’s spouse during that period.
The offer comes as Trump’s crypto initiatives come under scrutiny
Although the revised CLARITY Act does not mention President Donald Trump or any crypto projects, the timing is likely to attract attention.
Trump and his family have expanded their involvement in digital assets over the past year through ventures including the TRUMP memecoin and other crypto-related businesses. These activities have sparked criticism from ethicists and some lawmakers.
They questioned whether elected officials should be profiting from digital asset projects while in office.
However, the proposal is not a blanket ban on cryptocurrency ownership. The legislation expressly permits covered individuals to continue to hold digital assets as investments, subject to existing disclosure and conflict of interest requirements.
Ethical provisions will also be temporary. Restrictions Sunset is scheduled for noon on January 20, 2029, unless Congress extends it.
Ethics rules accompany broader overhaul of the CLARITY Act
The ethics language forms only one part of the greatly expanded version of the CLARITY Act.
The revised proposal adds a completely new framework. CFTC-regulated digital commodity dealers, including exchanges, brokers, dealers and custodians.
It also establishes Federal jurisdiction over registered participants in digital commodity markets during Protection of state enforcement authority against fraud and generally applicable state lawS.
Elsewhere, the bill adds new provisions allowing courts to order the seizure, freezing, burning and reminting of payment stablecoins in certain cases.
It also introduced additional law enforcement measures and technical changes related to the GENIUS Act.
Final Summary
- The updated CLARITY Act would ban public officials and their spouses from issuing or sponsoring digital assets for compensation while in office.
- The revised draft also expands the CFTC’s authority over digital commodity markets. The new stablecoin introduces implementation and market structure provisions.
