Senator Lummis Says Clarity Act Ethics Provisions and Other Key Items Still Open for Negotiation

The updated text of the U.S. Senate's Digital Asset Market Clarity Act remains open to revision on several major provisions, including its government-ethics section, Senator Cynthia Lummis (R-Wyo.), one of the bill's lead negotiators, told CoinDesk on Wednesday. Lummis released the latest version earlier that day, merging the separate bills previously passed by the Senate Banking and Agriculture Committees into a single, longer piece of legislation.

The Clarity Act is part of a broader congressional effort to establish the first comprehensive federal market-structure framework for digital assets, determining which tokens fall under SEC oversight as securities and which are treated as commodities under CFTC jurisdiction — a dividing line the industry has sought for years amid regulatory uncertainty and enforcement actions.

The Senate's Judiciary, Ethics, and Intelligence Committees all contributed to the bill, Lummis said. While she acknowledged the process has "been very difficult," she expressed satisfaction that a consolidated text was now available for broader review.

"It's time to show everyone the fully integrated bill that we will be voting on, and get the feedback from the industry that's about to be regulated, as well as others," Lummis said. "So I'm pleased we've reached this point."

Ethics Provision Remains the Central Sticking Point

The bill's proposed conflict-of-interest limits on government officials' involvement in cryptocurrency have been the provision most closely watched by both industry and Congress. Lummis confirmed that Republican negotiators had worked with Democrats "for weeks on end" but reached an impasse over whether state attorneys general should be empowered to bring criminal or private cases against parties bound by the ethics rules.

"That was a bright red line for a lot of U.S. senators who did not want to subject themselves to being sued by a different state attorney general," Lummis said. "That was also true of the White House, which has been subject to multiple lawsuits and prosecutions by state attorneys general, and so that's kind of a bright line issue for a lot of senators, and certainly for the White House."

Under the current framework, states could instead sue crypto exchanges that list assets in violation of the ethics provision. Beyond the president, the ethics agreement would extend to any lawmaker, any high-level federal judge — including those serving on district courts, appeals courts, the U.S. Supreme Court, or the Court of International Trade — and their spouses, Lummis said.

President Donald Trump's cryptocurrency business ties include a memecoin company that issues a coin named after the president and a stablecoin issuer.

Democrats Signal Opposition

A group of Democratic senators said in a statement late Wednesday that the bill still falls "short" of what is needed to earn their support, though they indicated they would continue working with Republicans. Senator Elizabeth Warren (D-Mass.), the ranking Democrat on the Senate Banking Committee, argued that the policy as drafted would allow Trump to continue his crypto businesses largely unaffected. She warned that any improper activity would be ignored by a loyal Department of Justice and then legally shielded from prosecution after he leaves office.

Illicit Finance and Other Outstanding Issues

Beyond ethics, lawmakers may continue negotiating over illicit finance provisions. Lummis expressed confidence in the current approach, saying, "We think we've landed in a good place," because the bill addresses the Bank Secrecy Act, money-laundering protections, sanctions coverage for exchanges, and decentralized finance (DeFi).

Several new additions were incorporated at the request of law enforcement, including a provision targeting crypto automated teller machine (ATM) fraud. The text also establishes a safe harbor allowing crypto platforms to freeze funds suspected of being tied to illicit transactions, particularly when those companies are cooperating with law enforcement.

SEC and CFTC Commissioner Consultation

The bill includes a provision stating that it is the "sense of Congress" that at least two commissioners on both the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) should be nominated in consultation with the minority party. Currently, neither agency has any Democratic commissioners — the SEC is led by three Republicans, while the CFTC is being run by a single commissioner.

Lummis attributed the delay in naming Democratic commissioners to Senate Minority Leader Chuck Schumer, saying he needs to submit candidate names to the White House.

"The language in there is not to compel the president to do something. It's basically to compel Senator Schumer to submit some names to the president," she said.

Uncertain Path to the Senate Floor

As of press time, it remained unclear when the bill might reach the Senate floor for a vote. Majority Leader John Thune's office told CoinDesk earlier Wednesday that he intends to bring the bill up soon. However, Lummis noted that a number of senators would be absent next week due to Senator Lindsey Graham's funeral.

The legislation requires at least 60 votes to advance, and the Senate is scheduled to leave Washington on August 7 for its summer recess. If the Senate passes its version, it would still need to be reconciled with separate digital-asset market-structure legislation advancing in the House before any final measure could reach the president's desk.

Source: CoinDesk