New Clarity Act Bans Trump, Officials from Issuing Crypto; 2029 Sunset

Senate Republicans released an updated version of the Clarity Act on Wednesday, adding a ban on the president, vice president, members of Congress, federal judges, and other covered officials from issuing or sponsoring digital assets. The draft, posted after stakeholder briefing calls, includes a new section titled “Ban on certain digital asset transactions,” which prohibits covered individuals from issuing or sponsoring a digital asset in exchange for consideration, extending to their spouses. It also bars platforms from listing any digital asset found to be issued or sponsored by a covered official in violation of the ban.

Ethics Provisions and Sunset

The bill provides a safe harbor: covered officials can avoid violation by placing a direct interest in a digital asset into a qualified blind trust, divesting it, or both, following procedures similar to ethics rules under Section 208 of Title 18. Another carve-out protects the continued use of a covered individual’s name, image, or likeness if an issuer or intermediary used it before the person entered covered status. The ethics package includes a sunset: the provisions expire at noon on January 20, 2029—aligning with the end of the current presidential term—and no person faces penalties after that date for conduct before it.

Political Context and Democratic Push

The ethics language addresses a months-long dispute over President Trump’s crypto ventures, which a July financial disclosure tied to roughly $1.4 billion in 2025 income through the $TRUMP token and World Liberty Financial. According to reports, the package was negotiated between the White House and Republican Senators Cynthia Lummis and Bernie Moreno, without Democratic sign-off. Democrats on the Banking Committee had pressed for enforceable conflict-of-interest rules, but an amendment to bar officials from crypto ties failed during the May markup of the Clarity Act.

Industry and Law Enforcement Components

Beyond ethics, the Blockchain Regulatory Certainty Act remains intact from the committee version, protecting non-custodial developers and infrastructure providers from being classified as money transmitters for building or maintaining decentralized networks. The Lummis-Grassley amendment retains criminal liability for anyone who “knowingly” facilitates illicit transactions, and the Keep Your Coins Act preserves the right to self-custody. On stablecoins, the Tillis-Alsobrooks compromise bans interest on idle payment-stablecoin balances but allows rewards tied to activity such as transactions or staking, as long as they do not function as interest on a bank deposit. The draft also expands law enforcement tools: increased funding for state and local crypto investigations and blockchain analytics, training for police and prosecutors, creation of a “cyber center” to counter nation-state actors like North Korea and Iran, and a public-private task force on fraud. Stablecoin issuers must comply with lawful orders to freeze, seize, burn, and reissue tokens. Bankruptcy protections treat customer digital assets as property of the customer rather than part of a failed company’s estate, aiming to prevent another FTX-style collapse.

The Clarity Act now moves forward with a comprehensive ethics framework that could reshape how top officials handle digital assets. With the 2029 sunset, lawmakers have a temporary but clear mandate to address conflicts of interest, while the broader regulatory provisions offer both protections and enforcement tools for the crypto industry. Next steps include further committee consideration and potential floor votes.