Senator Lummis: Ethics, other provisions in crypto Clarity Act to be further discussed

The U.S. Senate’s Digital Asset Market Clarity Act draft is still open to changes on a number of big-ticket items that include its government-ethics section, Senator Cynthia Lummis, one of the lead negotiators on the bill, said about the effort that’s “finally” getting closer to passage with the release of the text.

The Senate’s Judiciary, Ethics and Intelligence Committees all had input into the bill, Lummis told CoinDesk on Wednesday, and while the process has “been very difficult,” the bill is ready for additional feedback.

“It’s time to show everyone the fully integrated bill that we will be voting on, and get the feedback from the industry that’s about to be regulated, as well as others,” Lummis said. “So I’m pleased we’ve reached this point.”

Lummis released an updated text of the Clarity Act earlier Wednesday that merged the bills passed by the Senate Banking and Agriculture Committees into one longer bill. The updated text is not likely to be the final version of the bill.

The bill’s proposed conflict-of-interest limits for government officials’ crypto involvement will continue to be discussed through the weekend, and some of the illicit finance provisions may also see further discussion, Lummis said.

Ethics has been the most important provision the industry and the broader Congress has waited for. Lummis said that the Republican negotiators on the bill had worked with Democrats “for weeks on end” but were at an impasse over the role of state attorneys general and whether they could bring criminal or private cases against any parties bound by the ethics provision.

“That was a bright red line for a lot of U.S. senators who did not want to subject themselves to being sued by a different state attorney general,” Lummis said. “That was also true of the White House, which has been subject to multiple lawsuits and prosecutions by state attorneys general, and so that’s kind of a bright line issue for a lot of senators, and certainly for the White House.”

States could, instead, sue crypto exchanges that list any assets which would violate the ethics provision, Lummis said.

Beyond the president, the ethics agreement would apply to any other lawmaker, any high-level federal judge (including those on a district court, appeals court, the U.S. Supreme Court or the Court of International Trade) and their spouses, Lummis said.

President Donald Trump’s crypto business ties include a memecoin company that issues a coin named for the president and a stablecoin issuer.

A group of Democrat Senators said in a statement late Wednesday that the bill still fell “short” of where it needed to be to get their support, but that they would keep working on it with Republicans. Senator Elizabeth Warren, the top Democrat on the Senate Banking Committee, argued Wednesday that the policy as written would let Trump continue his crypto businesses largely untouched, and any improper activity would be ignored by his loyal Department of Justice and then legally fenced off from prosecution once he leaves office.

Beyond ethics, lawmakers may continue to negotiate over illicit finance provisions, Lummis said.

“We think we’ve landed in a good place,” she said, because the effort addresses the Bank Secrecy Act, money-laundering protections, sanction coverage for exchanges and decentralized finance (DeFi).

Some of the new additions were made at the request of law enforcement, such as a provision addressing crypto automated teller machine (ATM) fraud.

There is also a safe harbor for crypto platforms to freeze funds if they suspect the assets are tied to suspicious transactions, particularly if those companies are cooperating with law enforcement, she said.

The text also includes a provision saying it is the “sense of Congress” that at least two of the commissioners on the Securities and Exchange Commission and Commodity Futures Trading Commission would be nominated in consultation with the minority party. Right now, neither agency has any Democratic commissioners, with the SEC helmed by three Republicans, while the CFTC just has a single commissioner running the agency.

Lummis said the hold-up on getting Democrats is on Minority Leader Chuck Schumer’s end, as he needs to submit names to the White House.

“The language in there is not to compel the president to do something. It’s basically to compel Senator Schumer to submit some names to the president,” she said.

As of press time, it’s also unclear when the bill may hit the Senate floor for a vote. Majority Leader John Thune’s office told CoinDesk earlier Wednesday that he wants to bring the bill up soon, but Lummis noted that some of the Senate would be absent next week for Senator Lindsey Graham’s funeral. The bill needs at least 60 votes to advance, and the Senate leaves town on August 7 for its summer recess.