A new version of the Digital Asset Market Clarity Act contains stricter ethics provisions that would more explicitly bar the U.S. President and other senior government officials from issuing a digital asset, sponsoring a digital asset or otherwise "maintain a significant financial interest" except under certain conditions.
The new draft of the Clarity Act, released publicly early Monday, contains the latest — and possibly final — language ahead of a key vote on Tuesday. This language includes forcing divestiture of crypto interests and allowing state attorneys general to bring lawsuits to enforce the ethics provision. The text is different from the last version of the bill released last Thursday.
The ethics provision was one of the major outstanding issues standing in the way of passage of the bill. That's not to say the bill has an easy path to becoming law following President Donald Trump's reported agreement to the ethics provision. The bill needs 60 votes in favor during Tuesday's scheduled cloture vote, and both Democrats and Republicans had previously expressed concerns about various provisions. Democrats generally were most concerned about the prior ethics provision language, while a handful of Republicans were looking at stablecoin yield and rewards language.
If the bill survives this week's cloture vote, it'll keep the legislative process going but there will be additional votes, including a final passage vote. The House of Representatives will also need to take up the bill when it returns from its recess after the election in November.
The ethics provision also includes civil penalties for the issuer and, in a change from the previous draft, allows state attorneys general to bring lawsuits to enforce it. The new bill also gets rid of a previous sunset provision for enforcement.
"Not later than the effective date of division C of the Digital Asset Market Clarity Act under section 30104 of that division, a covered individual who maintains a significant financial interest shall — divest the significant financial interest; or place the significant financial interest in a qualified blind trust," the revised text said.
The "covered individual" — the bill's term for a senior government official who falls under the ethics provision — would then have three days to notify the appropriate ethics office, which in turn would have another three days to publicly announce the divestiture. That divestiture will be treated as a sale.
The text also bars crypto exchanges from listing any digital assets issued by a covered individual.
Other changes in the bill include tweaks to language governing decentralized finance and the Blockchain Regulatory Certainty Act, and a provision that would allow the U.S. Treasury Secretary to restrict stablecoin rewards if the Treasury Department finds that there is deposit flight occurring out of community banks, though that ability will only last for 18 months after the bill is signed into law.