Summary
Seven Senate Democrats rejected the latest CLARITY Act draft as falling short on ethics, consumer protection, illicit finance, conflicts of interest and market integrity. The rejection, on the same day Sen. Lummis released the merged updated text, leaves the bill without a bipartisan agreement and pressures the calendar before the August recess.
Key Points
- Seven Democratic senators objecting: Cortez Masto (NV), Alsobrooks (MD), Booker (NJ), Gallego (AZ), Hickenlooper (CO), Warner (VA), Warnock (GA).
- Democrats say bill falls short on ethics, consumer protection, illicit finance, conflicts of interest, market integrity.
- Updated text released July 22 by Sen. Lummis merging Senate Banking + Agriculture committee bills.
- Senate Banking Committee approved the bill in May by bipartisan 15-9 vote.
- Ethics provision: bans president, VP, Congress, federal judges (and spouses) from issuing/sponsoring digital assets for compensation; violators surrender profits + civil penalties.
- Intermediaries knowingly listing prohibited tokens: fines up to $250,000 per violation per day.
- Officials with pre-existing interests must divest or use qualified blind trust; disclose sales >$1,000.
- Senate Banking Subcommittee summary: bill applies one ethics standard to everyone including the President, with DOJ enforcement mandate.
- White House adviser Patrick Witt: federal-only enforcement consistent with existing ethics laws; retroactive penalties for Trump's past conduct would violate ex post facto clause (Art. I, Sec. 9).
- Lummis: state-AG criminal/private enforcement is a "bright red line" for Republicans and the White House; states can still sue exchanges listing violating assets.
- Calendar: needs 60 votes; Senate leaves ~Aug 7-10; House passed a substantially different version requiring reconciliation.
- Connects to prior-day Bloomberg report alleging Lutnick/Hines steered GENIUS Act in Tether's favor.