Senate Republicans Issue Final Clarity Act Text With Ethics Overhaul

On Sunday, Senate Republicans published the final version of the Clarity Act, incorporating modifications requested by Democrats and reworking the ethics section that had been a contentious issue.

The replacement text spans 635 pages, five more than the September 10 draft. Senators are scheduled to vote Tuesday afternoon on cloture for the motion to proceed, a step requiring 60 votes.

Clarity Act Ethics Division Overhauled in Final Text

Senators Cynthia Lummis, John Boozman, and Tim Scott stated that the document represents over a year of bipartisan talks. Their office tallied 126 substantive changes requested by Democrats.

The updated draft (EHF26724) strengthens the Clarity Act in multiple ways that will impact the industry. The ethics division stands out as the main change. It has been renamed and restructured.

• A new prohibition on possessing a "significant financial interest" — defined as $15,000 or more in equity in any company that derived most of its revenue from token issuance or sponsorship in any of the previous three years — requires divestment or a blind trust. The September version contained no such ban.
• Coverage now includes presidents-elect, vice presidents-elect, and members-elect before they take office.
• The rules still apply only to spouses. Children and dependents are excluded, a scope more limited than federal disclosure law, which mandates reporting of dependent children's assets.
• The 2029 expiration date and the severability clause have been removed.
• Penalties change from a 10% maximum to a 20% minimum, adjusted for inflation, and they now cover both the interest and the transaction.
• State attorneys general now have legal standing to bring lawsuits. The earlier draft explicitly excluded them and private plaintiffs, a section that has been removed.

Other Changes in Final Clarity Act Beyond Ethics Title

Elsewhere, the rule on exchanges trading for their own account has been renamed a prohibition on proprietary trading, and its exemptions are tightened from actions "in support of the business" to a standard of what is "necessary," under new CFTC regulations.

Exchanges and wallets — not token issuers — are subject to a circuit-breaker: if the Treasury determines within 18 months that community-bank deposits are flowing into stablecoins, it must create rules that cover yields "similar to" bank interest. This is a lower threshold than the existing ban in the bill and poses a risk to exchange reward programs.

"Network token" is now defined as a digital asset rather than a digital commodity, a wider classification. States retain authority to enforce deceptive practices unless preempted. CFTC exemptions must go through the Commodity Exchange Act's Section 4(c) process.

One provision works in the opposite direction. Software developers receive protection from Bank Secrecy Act registration and from being classified as financial institutions, yet they lose the explicit safeguard against criminal money-transmitting liability that the previous draft provided.

Republicans Call This the Final Version for Democrats

The revised text emerged days after President Donald Trump consulted with advisors on Friday about the ethics provisions. According to journalist Eleanor Terrett, Republicans are presenting this draft as their final and most favorable offer ahead of Tuesday's cloture vote.

“President Trump voluntarily agreed to unprecedented ethics restrictions, holding every federally elected official, judge, and their spouses to some of the toughest ethics restrictions in U.S. history,” Senator Lummis said.

Lummis characterized the upcoming vote as a gauge of whether Democrats will accept the agreement they helped shape.

“A no vote on Tuesday means opposing real ethics reforms on politicians’ personal investments… Democrats got what they wanted; now they need to take yes for an answer,” she added.

Whether the revamped ethics section secures the seven Democratic votes that Republicans still require will be evident on Tuesday.