CLARITY Act Adds Restrictions on Crypto Activities by US Officials

The latest version of the US CLARITY Act would bar the president, vice president, members of Congress, senior executive branch officials, and their spouses from issuing or sponsoring digital assets while in office.

The proposed restrictions would also apply to certain senior officials at financial regulators, including the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). The provisions would expire on January 20, 2029.

The restrictions come after Democrats had called for ethics provisions to be added to the bill. In a previous development, Senators Elizabeth Warren, Jeff Merkley, and Chris Murphy said they would not support the CLARITY Act without measures addressing potential conflicts of interest involving public officials and digital assets.

Under the proposed rules, covered officials would not be allowed to issue, sponsor, promote, or endorse digital assets. The restrictions would not apply to ordinary purchases or sales of digital assets, or to assets held through diversified investment funds.

The latest version of the CLARITY Act would also require certain public officials to disclose digital asset holdings and transactions. The bill is intended to establish a regulatory framework for digital assets in the United States and define the responsibilities of federal financial regulators.

The ethics provisions are part of negotiations over the bill as Senate Republicans seek enough Democratic support to advance the legislation. The Senate has not yet voted on the CLARITY Act.