TLDR
- Trump-backed ethics language would bar federal officials from issuing cryptocurrencies while serving in public office.
- The Justice Department would enforce the provision, replacing state attorneys general under the current draft.
- Democrats may resist DOJ control after arguing states should share enforcement power under the bill.
- Patrick Witt discussed the ethics language during an industry call with crypto stakeholders on Tuesday.
- The CLARITY Act still faces Senate hurdles despite Trump approving negotiated ethics language this week.
President Donald Trump’s crypto ethics proposal has reopened a Senate fight over the CLARITY Act, as lawmakers weigh a ban on federal officials issuing digital assets. The draft gives DOJ enforcement power, raising Democratic concerns over state authority before a tight August deadline for the bill to advance in Congress.
Trump-Backed Ethics Language Targets Federal Officials
The newly approved ethics language would prohibit federal officials from issuing cryptocurrencies while serving in office. The restriction would apply to the president, vice president, members of Congress, and other covered federal officials.
The proposal comes after months of negotiations over how to prevent public officials from profiting from digital assets while holding government power. Ethics language has been one of the final barriers facing the CLARITY Act, a broad crypto market structure bill.
The issue has drawn attention because of Trump’s crypto-linked interests, including his memecoins and his family’s company, World Liberty Financial. Financial disclosures released last month showed millions of dollars tied to WLF, adding pressure for stronger ethics safeguards.
The language was discussed Tuesday during an industry call with White House crypto adviser Patrick Witt. Trump had agreed to the ethics package late Monday after negotiators worked through several disputed provisions.
DOJ Enforcement Creates New Senate Dispute
The draft language would make the Justice Department the main enforcer of the crypto ethics rule. State attorneys general would not hold the leading enforcement role under the current version.
That structure could become a flashpoint in the Senate. Some Democrats have argued that states should have some enforcement power, especially in cases involving public officials and crypto activity.
Sen. Angela Alsobrooks, one of the main Democratic negotiators on the CLARITY Act, raised concerns over the enforcement structure. She criticized the idea of placing enforcement authority mainly with the Justice Department.
Alsobrooks said, “This DOJ enforcing an ethics provision? That’s an unserious offer, and I wouldn’t support the bill if that’s the language.” She added that negotiators would keep working toward an agreement that holds officials accountable.
The dispute comes as lawmakers try to complete the bill before the August recess. The CLARITY Act aims to set federal rules for digital asset markets and clarify oversight roles across agencies.
White House Pushes for CLARITY Act Passage
The White House did not confirm the exact wording of the ethics provision. However, officials said the administration continues working with lawmakers to pass the CLARITY Act.
A White House official said, “If Senate Democrats block this historic legislation after the administration has bent over backward to accommodate their concerns,” Democrats would be responsible for blocking the bill.
The official added that stakeholders should view any failure as proof that Democrats “were never serious about a legislative outcome.” Democrats have not yet signaled broad support for the current enforcement structure.
The bill still needs enough Senate support before moving forward. If passed by the Senate, the legislation would return to the House before reaching Trump’s desk.
The next test will be whether lawmakers can settle the enforcement question. The ethics rule has moved closer to agreement, but DOJ control could decide whether the CLARITY Act gains enough support.
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