Lummis Says Senate’s CLARITY Act Still Open to Changes as Ethics, Illicit-Finance Talks Continue

A revised draft of the CLARITY Act, the U.S. Senate’s digital-asset market structure bill, has been released, but negotiations are expected to continue on key ethics and illicit-finance provisions.

CoinDesk reported on July 22 that Senator Cynthia Lummis, the Republican leading negotiations on the CLARITY Act, said the newly released bill is not final and could still be revised to reflect additional feedback.

“We’re now at the point where we can show everyone the combined bill we’ll vote on and get input from stakeholders, including the industry that would be subject to regulation,” Lummis said. “I’m glad we’ve reached this stage.”

Negotiations over ethics provisions addressing conflicts of interest tied to government officials’ crypto assets are set to continue through the weekend. Some illicit-finance provisions are also still under discussion.

One of the main sticking points in the ethics talks is whether state attorneys general should have enforcement authority. Lummis said Republicans and Democrats have been negotiating for weeks but have not resolved whether state attorneys general should be allowed to bring criminal or civil cases against those covered by the ethics provisions.

The ethics rules currently apply not only to the president, but also to members of Congress, senior federal judges and their spouses.

Further talks may also continue on the illicit-finance language. The current bill includes provisions related to the Bank Secrecy Act, anti-money laundering, exchange sanctions and decentralized finance, or DeFi. It also includes language on crypto ATM fraud requested by law enforcement agencies.

The bill also contains a safe-harbor provision that would allow crypto platforms to freeze assets linked to suspicious transactions. The measure would provide legal protection for companies that cooperate with law enforcement in freezing suspicious assets.

The timing of a Senate vote on the CLARITY Act has not been set. The bill needs at least 60 votes to pass the Senate, which is scheduled to begin its summer recess on Aug. 7.