Senate Republicans Draft Clarity Act with Crypto Ban for Officials, Sunset in 2029

The updated Clarity Act draft, released by Senate Republicans, includes a new section that prohibits the president, vice president, members of Congress, federal judges, and other covered officials from issuing or sponsoring digital assets during their tenure. This ban extends to their spouses and is designed to prevent conflicts of interest in crypto ventures. Officials can avoid violations by placing their digital assets in a qualified blind trust or divesting them, following procedures similar to existing ethics rules.

The bill also features a sunset clause, meaning these provisions expire at noon on January 20, 2029, coinciding with the end of the current presidential term. The draft was negotiated primarily between the White House and Republican senators Cynthia Lummis and Bernie Moreno, without Democratic support at this stage.

This legislation responds to ongoing disputes over President Trump’s crypto activities, notably his holdings in the $TRUMP token and related ventures, which reportedly generated around $1.4 billion in 2025 income. Industry sources note that the bill preserves key provisions like the Blockchain Regulatory Certainty Act, which protects non-custodial developers and infrastructure providers from being classified as money transmitters.

Additional amendments include criminal liability for facilitating illicit transactions, protections for self-custody, and restrictions on interest paid on stablecoin balances. The bill also enhances law enforcement tools, including increased funding for crypto investigations, blockchain analytics, and a cyber center targeting nation-state actors. It mandates stablecoin issuers to comply with lawful asset freezes and seizures, and introduces bankruptcy protections for customer digital assets.

The draft, totaling 616 pages, has yet to gain Democratic support but is expected to be voted on in the Senate soon. The legislation has broad backing from industry and some lawmakers, with efforts underway to pass it before the August recess.