President Trump supports the CLARITY Act, which enforces stricter regulations on government officials involved in cryptocurrency activities.
On September 14, U.S. Senate Republicans revealed the finalized CLARITY Act, which introduces stricter regulations for government officials involved in the cryptocurrency sector. President Donald Trump has expressed his support for the new regulations, according to Senators Cynthia Lummis, John Boozman, and Tim Scott.
The finalized text comes ahead of a procedural vote scheduled for September 15, incorporating 126 significant amendments made during discussions, largely at the request of Democratic lawmakers.
A key change allows state prosecutors to enforce ethical standards, responding to concerns raised by both Democrats and Republican Senator Thom Tillis regarding potential conflicts of interest related to Trump’s crypto business.
Key Amendments to the Act
The updated version of the bill now mandates that officials divest from significant financial interests in cryptocurrency-related businesses. Affected officials and their spouses must either sell such interests or place them in a qualified blind trust, which will be managed by an independent trustee.
State prosecutors will have the power to pursue judicial enforcement of these prohibitions, allowing lawsuits against the U.S. Attorney General in cases of suspected violations. The bill also permits direct lawsuits against crypto intermediaries that issue assets in violation of the ban.
Concerns from banks about stablecoins were also addressed. If the Treasury Secretary identifies a significant outflow of deposits, new rules will limit rewards for payment stablecoin holders, with these powers expiring 18 months post-enactment.
Furthermore, the revisions expanded protections for miners and validators under the Blockchain Regulatory Certainty Act, though references to the criminal statute 18 U.S.C. 1960 were removed. The changes also reinforced restrictions on related-party transactions and conflicts of interest for crypto exchanges, brokers, and dealers.
Voting Outlook
The Senate will vote on September 15 to potentially end debate on the CLARITY Act, requiring 60 votes for advancement. While optimism has been expressed, confirmed support has not yet reached the necessary threshold, with ongoing negotiations as of September 11.
Democratic Senator Angela Alsobrooks emphasized that state prosecutors must have the authority to act if the Justice Department does not, indicating that ethical issues need to be addressed for her support.
"I have made it abundantly clear that I will not vote for any bill that does not address ethical issues," she stated.
Even if the Senate approves the bill, a quick resolution remains uncertain. Galaxy Research Director Alex Thorn noted skepticism about the bill’s passage before the November midterms, especially given the House's need to reconcile changes. Current market predictions suggest less than a 50% chance for the bill’s completion by year-end, with traders estimating a 31% likelihood of it being signed into law before the end of 2026.
Additionally, Republicans recently proposed an updated version of the bill that includes requirements for decentralized finance (DeFi) trading protocols that do not meet decentralization criteria.
