US Republicans send ‘final’ CLARITY Act offer to Democrats

Senate Republicans unveiled a revised version of the CLARITY Act, a 635-page proposal, on Sunday ahead of a crucial vote on Tuesday. Crafted after a year of bipartisan negotiations, the final offer includes ethics provisions agreed to by President Donald Trump, who has pledged to enforce strict rules on federal officials' involvement with digital assets. The bill aims to enhance regulations around blockchain, stablecoins, and digital commodity exchanges.

Key amendments to the CLARITY Act include expanded ethics provisions that empower state attorneys general to enforce bans on federal officials, judges, and their spouses from holding significant financial interests in digital assets or serving on exchanges violating these bans. Violations could result in civil penalties of $500,000 or 20% of the amount received in the transaction, whichever is higher.

The ethics rules will come into effect either 360 days after enactment or earlier if implementing regulations are finalized.

Moreover, the revised bill alters the Blockchain Regulatory Certainty Act (BRCA) by extending safeguards to miners and validators, excluding them from being classified as money transmitters or financial institutions under the Bank Secrecy Act. The revised proposal also removes references to Section 1960 of Title 18 of the U.S. Code, which prohibits unlicensed money transmitting businesses.

Other modifications strengthen protections around affiliate trading and conflicts of interest at digital commodity exchanges, brokers, and dealers, as well as clarify consumer protection laws' applicability. Senate Banking Digital Assets Subcommittee Chair Cynthia Lummis stated that the new bill reflects a year of intense negotiations and 126 changes made in response to Democratic input, setting the stage for a procedural vote on Tuesday.