For a year, a crucial part of the most significant cryptocurrency law in U.S. history was missing. While most of the CLARITY Act – including rules for how crypto markets would operate, how digital assets would be classified, protections for decentralized finance, and which government agencies would oversee it – was written and finalized, the section dealing with ethics – specifically, preventing officials from profiting from the industry they regulate – remained unfinished. This gap was finally addressed on Wednesday when Senate Republicans released the updated bill text. This provision, which former President Trump approved earlier in the week, is now the central focus for the crypto industry, which had previously downplayed the importance of ethics rules. The new rule prohibits federal officials, including the President, from owning or trading digital assets while in office, with penalties of up to $250,000 per day enforced by the Department of Justice. The White House claims it’s the strongest ethics rule for crypto ever written into law. However, a closer look reveals that its key features – what it covers, who enforces it, and when it expires – are carefully designed to address concerns while still winning the support of key senators. The coming days will be crucial to see if this provision can survive further debate and scrutiny.
