Revised CLARITY Act Adds Crypto Ban for Presidents and Congress Members: Requires Officials to Divest

US Senate Republicans revealed a revised version of the CLARITY Act on Wednesday as part of efforts to advance the cryptocurrency bill towards a floor vote. However, the bill could face massive resistance as the revised components directly ban presidents and Congress members from issuing or sponsoring cryptocurrencies.

Under the proposed bill, the US president, vice president, members of Congress, federal judges, and other officials would be prohibited from issuing or sponsoring cryptocurrencies and other digital assets for compensation while in office. More importantly, their spouses would also fall under the limitation.

Trump's Crypto Fortune to Take a Hit?

Remember the $Trump coin that US President Donald Trump launched over a year ago? The token surged overnight after launch only to lose over 90% of its value in a short span, which is often hailed as one of the most prominent pump-and-dump schemes, as countless investors lost millions of dollars investing in the Trump coin.

Trump had reportedly made billions from cryptocurrencies in the past year. Even billionaire hedge fund manager Kenneth Griffin had expressed his concerns about the Trump Administration enriching itself at the cost of US taxpayers and the overall economy.

Prohibiting spouses from trading is crucial, as many Congress members have refuted insider trading allegations, citing that trades are made by their partners and they had no idea of investment activities at all.

The revised CLARITY Act bill also mandates officials to address cryptocurrency investments they already hold and must sell affected holdings, place them in blind trusts not under their control, or use a combination of both strategies. Furthermore, crypto sales above $1,000 would also have to be disclosed.

Enforcement of the proposed bill would largely fall under the purview of the US Justice Department, which would receive authority to pursue violations of the new rules. The latest provisions in the bill also cover crypto intermediaries, allowing enforcement against crypto exchanges that purposefully list tokens issued or sponsored in violation of the rules.

These new restrictions come after months of pressure from Democrats, who did not want Congress to enforce new laws for the crypto sector without addressing the ability of presidents and lawmakers to profit from businesses that could benefit from those policies.

'I want to thank my Democratic colleagues for their important contributions to this draft, and express my commitment to reaching a deal in the coming days that will allow this legislation to become law. Consumer protection and pro-innovation policy aren't opposites — this bill proves it,' Senator Cynthia Lummins had stated.

Even Senator Elizabeth Warren of Massachusetts, who is also a member of the Senate Banking Committee, has repeatedly cited Trump's crypto investments while demanding more robust conflict-of-interest provisions.

Next Steps for the Revised CLARITY Act

The revised bill now moves into another round of negotiations, where lawmakers will likely sort out any disagreements before the Senate can evaluate whether there is enough support for a floor vote.

The Senate is set to begin its August state work period on 10th August, leaving around three weeks for negotiators to settle issues, complete paperwork, and secure floor time.

Overall, the Senate has considerably revised the version passed by the House. It implies that both chambers would need to address their differences and approve identical language before the bill could be sent to Trump.