Key Senate Democrats are balking at the latest version of a cryptocurrency regulation bill over a White House-approved ethics provision that they argue falls short, complicating the bill’s chances of passing before lawmakers leave town next month.
Sen. Cynthia Lummis (R-Wyo.), who leads the Senate Banking digital assets subcommittee, unveiled an updated version of the Clarity Act on Wednesday. The 616-page text brought together the two halves of the bill from the Senate Banking Committee and Senate Agriculture Committee for the first time.
But most notable was the bill’s new ethics provision, which was recently agreed to by the White House. The provision bars public officials and employees, as well as their spouses, from issuing or sponsoring a digital asset. It also prohibits platforms from listing such assets for trading and puts the attorney general in charge of enforcement.
Democratic Opposition
Even before the new text was released, Democrats were raising concerns about the provision, particularly its enforcement mechanism.
“The provision that says only the DOJ would be allowed to have the enforcement responsibility, I think is just wild and unserious and stone crazy right now, given what we have seen from them,” Sen. Angela Alsobrooks (D-Md.) said at a Semafor event.
She and six other crypto-friendly Democrats pointed to this ethics provision, as well as a handful of other outstanding issues, in opposing the latest version of the bill.
“The Republican-proposed text of the CLARITY Act as it currently stands falls short,” Alsobrooks and Sens. Cory Booker (D-N.J.), Catherine Cortez Masto (D-Nev.), Ruben Gallego (D-Ariz.), John Hickenlooper (D-Colo.), Warner (D-Va.), and Warnock (D-Ga.) said in a statement.
“Key provisions including those addressing ethics for elected officials, consumer protection, illicit finance, conflicts of interest and market integrity must be strengthened,” they continued.
The Trump Factor
Trump’s financial disclosures, released in late June, show he made more than $1 billion in crypto-related income in 2025. Sen. Elizabeth Warren (D-Mass.), a longtime crypto critic and the top Democrat on the Senate Banking Committee, argued Wednesday that the Clarity Act should be “dead on arrival,” suggesting it “does nothing to prevent him from vacuuming up” more profits.
“Even if it did, the President can, and will, simply ignore the law because he handpicked his personal lawyer to lead the Department of Justice that is charged with enforcement and everyone else – including state attorneys general – are explicitly prohibited from bringing any enforcement actions,” she said in a statement.
“The bill goes even further to protect the President’s crypto profits by barring the next Department of Justice from ever holding Trump accountable,” Warren continued.
Republican Pushback
Patrick Witt, executive director of the president’s council of advisors for digital assets, hit back at Democrats, arguing in a post on X that they are “basically saying that ALL current federal ethics laws are meaningless because none of them are enforceable by state AGs.”
Lummis separately voiced frustration with her Democratic colleagues: “We’re also dealing of course with the president’s willingness to subject himself and Melania Trump to the most restrictive ethics language that a president has ever subjected himself to. But of course there’s no pleasing Democrats at this point.”
The Bottom Line
A cryptocurrency regulation bill faces Democratic backlash over a White House-approved ethics provision that would give the DOJ sole enforcement power. Seven Democratic senators say the provision falls short on ethics, consumer protection, and conflicts of interest. Republicans argue the provision is already unprecedented in its restrictions on the president. The bill needs at least seven Democratic votes to pass, and Senate Majority Leader John Thune (R-S.D.) has suggested it may not pass before the August recess.
