White House Agrees to Major Crypto Ethics rules in a last-minute push to save the CLARITY Act

Senate Republicans have released another round of revisions to the CLARITY Act as they seek Democratic support ahead of a September 15 procedural vote on the cryptocurrency market-structure bill.

The latest version runs to 635 pages, adds provisions on ethics, enforcement, stablecoin yields, and digital-asset market operations, and represents a last-ditch bid to pass the CLARITY Act this year.

The CLARITY Act is a proposed framework for digital commodities. According to the Congressional Research Service summary of the House bill, it would generally give the Commodity Futures Trading Commission responsibility for regulating digital-commodity transactions.

This includes exchanges, brokers, and dealers. The measure also assigns the Securities and Exchange Commission a role in specified digital-commodity activities and transactions.

What Changed in the Revised 635 Page CLARITY Act Draft?

The revised text incorporates an ethics framework supported by President Donald Trump, restricting public officials from engaging in digital assets.

Under this framework, officials with significant crypto holdings must divest or place assets in a blind trust. Both the Department of Justice and state attorneys general will enforce these ethics rules, addressing previous Democratic concerns.

The Blockchain Regulatory Certainty Act now focuses on Bank Secrecy Act compliance and removes protections for criminal proceedings.

The bill includes miners and validators in these narrowed protections. The bill also introduces a circuit-breaker mechanism for stablecoins, allowing federal regulators to intervene during significant withdrawals from community banks.

Additionally, the bill proposes stricter limits on vertical integration, including rules on affiliate trading and potential conflicts at digital commodity exchanges, while state consumer protection laws remain unchanged. Developer protections will not override derivatives regulations or alter rules for prediction markets.

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Lummis Frames the Bill as Finished

Senate Banking Digital Assets Subcommittee Chair Cynthia Lummis said the bill followed a year of intense daily bipartisan negotiations and described it as ready. She said Trump had voluntarily agreed to ethics restrictions that she characterized as among the toughest applied to federal officials in U.S. history.

Lummis argued that Democrats had received the concessions they sought and should support the measure. Her comments came with the release of the final CLARITY Act text and focused on the ethics provisions added during negotiations.

Coinbase CEO Brian Armstrong also voiced support for the CLARITY Act ahead of the Senate vote. Speaking on CNBC’s Squawk Box Asia on September 10, Armstrong said the bill was ready for approval and cited support from law-enforcement groups, banks, and crypto companies.

Armstrong said the revisions addressed Coinbase’s main concerns with the legislation. Coinbase had previously raised several issues that it considered essential, according to reporting on the company’s position.

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What Does the Vote Actually Decide?

The September 15 event is a procedural vote tied to the CLARITY Act. It follows Senate Republicans’ latest changes as they seek Democratic backing for the cryptocurrency market-structure measure.

The legislation itself would establish a regulatory framework for digital commodities, which it defines as digital assets that rely on a blockchain for their value.

Under the bill summary, the CFTC would generally regulate digital-commodity transactions, while the SEC would retain jurisdiction over certain activities and transactions involving digital commodities.

The framework also includes requirements for trade monitoring, recordkeeping, and the commingling of customer assets. It would subject digital-commodity exchanges, brokers and dealers to the Bank Secrecy Act for anti-money-laundering and related purposes.

The Senate’s consideration of the revised text therefore centers on a bill that combines market-structure provisions with the newly revised ethics and enforcement measures.

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