Revised CLARITY Act Proposes Ethics Rules for Public Officials and Crypto Tokens

A revised version of the CLARITY Act has introduced new ethics rules that would prohibit 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, the ethics provisions are among the most notable additions as they arrive amid growing scrutiny of crypto ventures linked to public officials.

The revised bill creates a new ethics framework covering “public officials or employees” and their spouses.

Rather than creating a new definition, it adopts the existing federal ethics definition, which includes the President and Vice President alongside other senior government officials.

Under the proposal, covered individuals would be prohibited from issuing or sponsoring a digital asset in exchange for compensation during their term of office.

The bill defines “issue” to include creating, minting, launching, or controlling the initial sale or distribution of a digital asset. It also defines “sponsor” broadly, covering agreements to fund, organize, or publicly endorse a token.

This includes permitting the use of a person’s name, image, likeness, or official position in connection with its creation or promotion.

If a digital asset is found to have been issued or sponsored in violation of those provisions, it could not be listed for trading on a digital asset intermediary under the proposal.

The restrictions would apply only while the official remains in office and would also cover the official’s spouse during that period.

Although the revised CLARITY Act does not mention President Donald Trump or any specific crypto project, 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. Those activities have prompted criticism from ethics experts and some lawmakers.

They have questioned whether elected officials should profit from digital asset projects while serving in office.

The proposal, however, is not a blanket prohibition on cryptocurrency ownership. The legislation expressly allows covered individuals to continue holding digital assets as investments, subject to existing disclosure and conflict-of-interest requirements.

The ethics provisions would also be temporary. The restrictions are scheduled to sunset at noon on January 20, 2029, unless Congress extends them.

The ethics language forms only one part of a substantially expanded version of the CLARITY Act.

The revised proposal adds an entirely new framework for CFTC-regulated digital commodity intermediaries, including exchanges, brokers, dealers, and custodians.

It also establishes federal jurisdiction over registered participants in digital commodity markets while preserving state enforcement authority over fraud and generally applicable state laws.

Elsewhere, the bill adds new provisions allowing courts to order the seizure, freezing, burning, and reissuance of payment stablecoins in certain circumstances.

Also, it introduced additional law-enforcement measures and technical amendments linked to the GENIUS Act.

• The updated CLARITY Act would prohibit 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. It introduces new stablecoin, enforcement, and market-structure provisions.