A new U.S. bill bans the president and members of Congress from issuing tokens or holding tokens, and the Trump family also has to fully sell off their holdings.

Author: CryptoSlate

Compiled by: DeepChao TechFlow

DeepChao Intro: The updated CLARITY Act put forward by Senate Republicans would bar the president, lawmakers, and other federal officials from issuing or holding crypto—also putting the Trump family’s crypto businesses within the scope of the restrictions. This is a key step toward building a nationwide U.S. crypto regulatory framework, but the bill still needs Democratic support to clear the Senate’s 60-vote threshold. Conflict-of-interest provisions have become the biggest point of contention.

On July 22, Republican senators released an updated version of the CLARITY Act, bringing one of Washington’s most important crypto bills back toward the possibility of a floor vote in the Senate.

The updated text, after weeks of negotiations, is intended to establish a broad federal market-structure framework for U.S. digital assets.

The proposal addresses several controversies that have blocked progress in Congress, including ethical restrictions on federal officials, stablecoin incentives, and how crypto developers and intermediaries are regulated.

Senator Cynthia Lummis said, in discussing the legislation: “I want to thank my Democratic colleagues for their important contributions to this draft, and to express my commitment to reaching an agreement in the coming days so that this legislation becomes law. Consumer protection and policies that support innovation are not opposing forces—this bill proves it.”

Asset manager Grayscale also said the bill would unlock the next wave of adoption for this emerging industry.

Republicans expect they will need Democratic votes to reach the 60-vote threshold required to overcome procedural hurdles in the Senate.

CLARITY Act bans federal officials from issuing digital assets

The revised legislation would impose a new set of restrictions on crypto activities by the president, lawmakers, and other senior federal officials, addressing a conflicts-of-interest issue that has been one of the biggest obstacles to Democratic support for the CLARITY Act.

Under the proposal, the president, vice president, members of Congress, federal judges, and other covered officials would be banned from issuing or sponsoring crypto and other digital assets for compensation while in office. Their spouses would also be subject to limits.

The legislation would further require covered officials to handle crypto and digital asset investments they already hold. They would have to sell the affected holdings, place them into blind trusts they cannot control, or use a combination of both approaches.

Crypto sales of more than $1,000 would also have to be disclosed, adding digital-asset transactions to the financial activities subject to more stringent scrutiny for officials during their time in government.

The proposal would instruct the Government Accountability Office to study whether there are still additional loopholes in the federal ethical rules for managing crypto, and to recommend further changes if necessary.

These restrictions respond to months of pressure from Senate Democrats, who argue that Congress should not create new rules for the crypto industry without addressing—at the same time—officials’ ability to profit from enterprises that could benefit from these policies.

Much of this pressure has centered on President Trump’s and his family’s growing involvement in digital assets.

Massachusetts Senator Elizabeth Warren, a senior Democrat on the Senate Banking Committee, has repeatedly cited Trump’s crypto businesses while pushing for stronger conflict-of-interest provisions.

Those concerns remained after the committee advanced CLARITY in May with a 15-9 vote. The committee version moved forward without the moral protections requested by Warren and several other Democrats, leaving the issue to be resolved before the legislation can win broader support across the full Senate.

This week, Trump accepted a Republican proposal that removed one source of uncertainty surrounding negotiations and established the restrictions the White House is willing to accept.

However, this language is unlikely to be final. Democrats have not signed onto the current wording and have already expressed concerns about making the Department of Justice the primary enforcement agency rather than providing a role for state attorneys general.

Further negotiations are expected on the ethics portion as Republicans seek the Democratic votes needed to move a broader CLARITY Act forward.

Developer protections preserved, criminal provisions expanded

While lawmakers are taking stricter rules toward public officials, the revised draft also preserves protections for software developers—sparking another battle between crypto advocates and some law-enforcement groups.

Frameworks for blockchain regulatory certainty typically protect developers and infrastructure providers from being classified as money transmitters solely for writing software or maintaining decentralized networks, provided they do not control users’ assets.

This protection has become a major issue for DeFi developers, who argue that writing software without custody of customer funds should not trigger the same regulatory obligations imposed on financial intermediaries.

The draft keeps these protections limited for people who knowingly facilitate illegal transactions, giving prosecutors a path to pursue criminal conduct rather than extending full immunity to activities involving decentralized technology.

Republicans pair these protections with a broad package aimed at addressing law-enforcement concerns about crypto crime.

The draft would provide additional resources for state and local investigations involving digital assets and expand access to blockchain analytics tools.

It would also create training programs for investigators and prosecutors, and establish a dedicated center to address threats related to cyber activity involving foreign actors (including North Korea and Iran).

A public-private joint task force would coordinate government and industry responses to crypto fraud, while stablecoin issuers would face requirements to comply with valid government orders, including actions such as freezing or seizing assets.

These changes build on the earlier Senate Banking Committee version, which already subjected digital-asset brokers, dealers, and exchanges to Bank Secrecy Act requirements, and included safeguards for developers that do not control customer funds.

This combination reflects a key balancing act in Senate negotiations: protecting peer-to-peer software development while ensuring these protections do not impede investigations into money laundering, sanctions evasion, and other crimes.

Stablecoin compromise avoids yet another reopening

Another controversy that threatened CLARITY earlier this year has largely been resolved in the new draft, reducing how many issues negotiators would have to re-negotiate before a floor vote.

The stablecoin portion preserves a compromise negotiated by Republican Sen. Thom Tillis of North Carolina and Democratic Sen. Angela Alsobrooks of Maryland.

Companies would be prohibited from paying interest simply because customers pay stablecoins into an account. Rewards related to eligible activity—including trading and certain other token uses—can continue, as long as they do not function like interest paid on traditional bank deposits.

This distinction arose after banking warnings that allowing stablecoin providers to offer deposit-like yields could pull funds out of insured bank accounts, while crypto firms argue that a broad ban could eliminate loyalty programs and other activity-based incentives.

At the same time, the updated legislation also preserves bankruptcy protections aimed at clarifying what happens to customers’ digital assets when exchanges or custodians fail.

Protected customer assets would remain the customer’s property rather than automatically becoming part of the bankruptcy estate available to creditors. After failures such as Celsius and FTX showed how differently customer claims can be handled depending on custody arrangements and contract terms, this distinction became a major issue.

These provisions address asset ownership and creditor treatment during bankruptcy, rather than preventing fraud, liquidity problems, or management failures that could lead to a crypto company collapsing.

What’s next for the CLARITY Act?

The revised text now moves the CLARITY Act into another round of negotiations. Lawmakers still need to resolve disagreements over ethics and other provisions before Senate leaders can assess whether there is enough support for a floor vote.

The calendar adds pressure. The Senate plans to begin its August state work period on August 10, leaving negotiators less than three weeks to resolve outstanding issues, complete necessary procedural steps, and ensure floor time.

As of the time of publication, no Senate vote on CLARITY has been scheduled.

Even if the bill passes the Senate, it would still face another legislative hurdle before reaching the White House.

The Senate has substantially amended the version passed by the House, meaning both chambers would need to reconcile their differences and approve the same language before the legislation can be sent to President Trump.

The Federal Market Structure Act assigns digital-asset regulatory responsibilities to the SEC and CFTC, sets rules for intermediaries, covers self-custody and the Bank Secrecy Act (BSA), and adds anti-CBDC provisions. As of June 3, 2026, the bill is awaiting a full Senate vote.