Clarity Act advances with Trump-backed ethics provision, DOJ enforcement

Jul 21, 2026

The Senate is advancing the Clarity Act, a major crypto bill, after President Trump backed a new ethics provision that bars federal officials from issuing digital assets. The rule, which sunsets in 2029, is a response to Trump's $1.2B crypto income in 2025. Passage remains uncertain as Democrats oppose giving the Department of Justice enforcement power, a key sticking point as the bill heads for a vote before the August recess.

Clarity Act ethics provision

▪An updated version of the Clarity Act includes an ethics provision banning federal officials from issuing or sponsoring digital assets.
▪The ethics ban applies to the president, vice president, members of Congress, federal judges, and their spouses.
▪The ethics provision does not extend to the children of public officials.
▪The ethics provision is temporary and includes a sunset clause, making it expire on January 20, 2029.

Trump crypto conflicts

▪Financial disclosures showed President Donald Trump earned about $1.2 billion in crypto-related income during 2025.
▪President Donald Trump has agreed to or signed off on the ethics section of the Clarity Act.
▪Approximately $580 million of President Trump's 2025 crypto income was connected with World Liberty Financial, a company co-founded by his family members.

DeFi developer protections

▪The Clarity Act preserves the Blockchain Regulatory Certainty Act (BRCA), which provides a safe harbor for non-custodial software developers.
▪The BRCA clarifies that non-custodial developers are not considered "money transmitters" and are thus exempt from related compliance burdens.

Democratic opposition concerns

▪The Clarity Act requires 60 votes to pass the Senate, meaning it needs the support of at least 10 Democrats.
▪Democrats have criticized the proposal for the Department of Justice to enforce the ethics rules, preferring state attorneys general to have that authority.

Senate August recess deadline

▪If the Clarity Act passes the Senate, it must still be approved by the House of Representatives.
▪Senate Majority Leader John Thune plans to bring the Clarity Act to a floor vote before the August recess.

DOJ enforcement role

▪The bill would task the Department of Justice with enforcing the ethics ban on federal officials.
▪The Department of Justice could levy a fine of up to $250,000 per day for violations of the ethics provision.