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When we last checked in on the CLARITY Act – which would establish a Congressionally approved regulatory framework for digital commodities and clarify the roles of the SEC and CFTC – SEC Chair Paul Atkins was testifying before the Senate Committee on Banking, Housing and Urban Affairs about his support for the legislation and the SEC’s role in implementing it. That was back in February. It’s now late July, with a month-long Senate recess approaching on August 7th.

The House passed the bill earlier this month, after a long delay over ethics concerns about crypto ventures of the President and other officials. In mid-July, Trump agreed to restrictions included in this version of the bill – but now lawmakers have to agree on who would enforce them and how long they would last. This 24/7 Wall St. article from last week gives more detail:

Under the draft released Wednesday, the language would bar the president, vice president, members of Congress, federal judges and other covered officials, along with their spouses, from issuing or sponsoring digital assets for compensation while in office. It addresses the conflict Democrats had demanded be fixed, but with two caveats they seized on immediately: the provision sunsets in 2029, and regulators get a full year after enactment to implement it. The market responded to the initial news, with the total crypto market gaining roughly $70 billion in a day . . .

Senate Republicans released an updated draft on Wednesday, but no floor vote has been scheduled, and Democrats had not reviewed the text when the first objections landed. Traders were already pricing what passage would be worth.

The article continues:

The agreed language hands that [enforcement] job to the Department of Justice (DOJ) alone and leaves state attorneys general out of it. Democrats object because the DOJ answers to the president those rules are written to restrict, and Trump’s former personal lawyer, Todd Blanche, has been running the department as acting attorney general since April while he awaits a Senate vote on his nomination to the permanent job. State attorneys general would stand outside that chain of command, and many of them are Democrats, which is precisely why Republicans want them kept out.

The article notes that the CLARITY Act needs 60 votes to clear the Senate. It also says that due to the approaching midterms, the legislation is likely to stall out if it doesn’t pass before the August recess. Former Chief of the SEC’s Office of Internet Enforcement and avid crypto critic John Reed Stark testified at a “public forum” yesterday and calls the CLARITY Act the “worst financial legislation in modern American history.” On the other side of the coin (no pun intended), proponents say the bill would bring much-needed clarity (hence the Act’s nickname) and help the US compete globally in the crypto industry.

– Liz Dunshee